Cash Flow Statement and Sold Loans

Question

How to you categorize sold loans in the Cash Flow Statement?

Answer 1

This could be a tricky question. While trying to understand the basic sections of The Cash Flow Statement: Operating Activities, Investing Activities, and Financing Activities, one could easily say that for the majority of companies this could relate to the Investing Section. However, it would be best to take into an account the industry of the company that is selling a loan. If this company happens to be in Investment Industry, selling of the loans will be their primary business that brings in the cash; hence it would be considered an operating activity.