Alright, now let's do the financing activities section of the cash flow statement. So for financing activities, we're gonna be focused on changes in long term liabilities and equity. Alright. So remember when we talked about the indirect method or the direct method, that was only for operating activities, financing is its own beast, just like investing. Okay, so let's think about some of the main cash inflows and outflows from financing activities. So when we talk about inflows, that means we're getting cash. So that could be uh selling bonds or notes payable, right? If we if we sign a note payable and get a loan from from the bank, um the next cash inflow would be issuing equity, right? If we issue equity, that means we're gonna get cash and give out common stock, something like that. And finally, the last cash inflow that you'll probably run into is selling Treasury stock. Right? If we have some Treasury stock and we sell it. Well, that's going to end up as a cash inflow in our financing section. About cash outflows. Well, it's gonna be similar except the opposite. If we repay bonds or notes payable. Those are gonna be cash outflows when we pay off the principal. And I'm gonna say, I want to write that in here, we're talking about the principal, not the interest interest falls into uh it didn't fit there. So I'm gonna put np for notes payable. And I'm gonna say principal. Right? Remember when we're dealing with the interest, expense and the interest paid, that goes into the operating section, when we're dealing with the principal amount, that's when we're dealing with the financing section, like in this segment here. So repaying bonds and notes payable, that's going to be outflows of cash. Well, what about when we pay dividends when we pay dividends to our stockholders? That is also going to be a cash outflow, right? If we pay cash dividends, well, that's gonna be a cash outflow. And if we purchase Treasury stock, these are gonna be the main cash inflows and outflows that you're gonna see. I put T stock there for Treasury stock. Okay. Just like we did with the investing section, we're gonna have to be familiar with a few T accounts when we deal with the financing section. So let's go ahead and deal with the retained earnings account and dividends payable. Now, I want to make a note here about dividends payable because if you think about dividends payable, they are a current liability. Right? But when we're talking about the operating section of the cash flow statement, we are dealing with operating current liabilities, dividends, payable is not an operating current liability. This has to deal with the financing activity of paying dividends. Okay, so you want to be very careful when you see dividends payable and you're doing your operating section of your cash flow that you leave the dividends as part of the financing activities. Because dividends is related to the stockholders and its financing activity, not a operating activity. So let's think about these two T accounts here with the retained earnings, it's going to have some sort of beginning balance right? It's gonna have some sort of beginning balance as a credit right? Because it's an equity account. And what increases the begin the retained earnings is when we have net income, our net income is going to increase our retained earnings and dividends, decreasing retained earnings. Right? You guys should be experts with that by now. We deal with retained earnings all the time. So that's how our retained earnings account is gonna flow. Beginning balance plus the net income minus the dividends gets us to the ending balance. So notice these dividends right here. This is important. Right? The dividends here and these are the dividends. I want to make a note here. These are dividends declared. Right? Remember when we when we talked about dividends and depth, we talked about declaring the dividends on the dividend on the declaration date and then we pay the dividends on the payment date. Right? So when we're thinking of the cash flow statement, what do you think? We're we're focused on the declaring of dividends or the paying of dividends, the paying of dividends. Right. And that comes out of the dividends payable account. So if you guys want to have a refresher on the dividends, I suggest going back to that stockholders equity section and reviewing that dividends lesson. Okay, so let's finish up dividends payable here. So this is a liability account that would have some sort of credit balance um to start and then we would have our dividends declared. We would declare some dividends. That would increase the balance of the dividends payable. And how do we get rid of the balance well by paying those dividends? Right. So we would pay dividends and that would be the amount that we want for our cash flow statement. Right? This is the financing activity, the paying of dividends. That's the financing activity right there. So notice they can give you information about the retained earnings accounts, the dividends declared, and you would have to figure out what the actual payment of dividends was in cash. Okay. So we've seen similar examples when we're dealing with the investing section, where you would have to back into the career, check them out for the cash flow. All right, so you're gonna want to be familiar with the retained earnings and dividends payable account to figure out the amount of dividends paid in cash. Cool. Alright. Let's go into an in depth example about the financing activities