What do financing activities in a cash flow statement indicate?

Financing activities in a cash flow statement specifically represent cash transactions that affect the company's capital structure. This includes inflows and outflows of cash related to transactions such as issuing or repurchasing stock, obtaining or repaying loans, and paying dividends. These activities provide insight into how a company finances its operations and growth, indicating whether it is relying on debt, equity, or operations to fund its activities. Understanding financing activities helps stakeholders assess the long-term financial stability and investment strategy of the company, highlighting how effectively it is managing its financial leverage and sourcing capital for investment.

The other options relate primarily to operational activities (A and C) or short-term asset purchases (D), which do not reflect the financing aspect of cash flows.