Financing Cash Flow refers to the amount of money that the company has raised by issuing bonds and stocks or the amount of borrowed money that has been repaid. It helps understand the transactions that have taken place within the capital structure, i.e debt and equity.
Increase/decrease of long-term and short-term borrowings and share repurchase as well as share sale are considered while calculating cash from financing activities.
A positive cash from financing activities balance indicates that money has flown into the company either via sale of common stock or debt instruments, i.e. the company has raised money from the market. A negative balance indicates that the company has either paid dividends or repaid a part of its debt or repurchased shares.
Cash flow from financing activities provides investors with insight into a company’s financial strength and how well a company's capital structure is managed.