Cash flow statements are divided into which three sections?

The correct answer highlights that cash flow statements are divided into three specific sections: investing activities, operating activities, and financing activities. Each of these sections serves a distinct purpose in providing insights into a business's cash flow dynamics.

1. Operating Activities: This section reflects the cash flows associated with the core business operations, including revenues from sales and cash payments for goods and services. It highlights how much cash is generated or consumed through normal business operations, indicating the efficiency of the business in generating cash from its recurring activities.

2. Investing Activities: This part tracks cash flows from acquisition and disposal of long-term assets, such as property, equipment, or investments in other businesses. Understanding this section helps stakeholders evaluate how much money a company is investing in future growth versus how much it is returning from those investments.

3. Financing Activities: This section accounts for cash flows related to funding the business. It includes cash received from issuing debt or equity and cash outflows from paying dividends or repaying loans. This area is crucial for assessing how a company finances its operations and growth initiatives.

Each of these sections provides stakeholders with valuable information about where a company's cash is coming from and where it is going, which is essential for evaluating the