This segment refers to how the cash flows pertaining to your long-term capital providers are structured. For example, the issue of fresh shares, rights issue to existing shareholders, raising debt through long-term loans will all constitute inflows from financing activities. On the other hand buyback of shares, payment of dividends to shareholders and repayment of long-term loans will all be classified as outflows from financing activities. This segment is very important because it shows how your capital investments are being financed. For example, a sound company will try to finance most of its capital investments through internal cash flows and only the balance if any will be financed through equity or debt funding. Companies give a good valuation to companies that are not too hungry for capital.