Categories: Cash

Understanding Loan Made to Stockholder on Cash Flow Statement

Loan made to Stockholders, which may include a loan from shareholders, represents an inflow of cash from this particular shareholder to the company. This loan is typically either secured or unsecured and is reported in the financing section of the cash flow statement. This type of loan signifies a financing activity as the company is receiving cash inflow from the stockholder. Any payments or interest paid to the loan must be reported as well to accurately reflect the cash flow.

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