Collecting the principal on a loan to another company would be reported on the investing activities section of the statement of cash flows.

Yes

Explanation:

The Statement of Cash Flows has 3 broad sections - operating activities, investing activities and financing activities.

Operating activities consist of cash flows derived from the normal operations of a company. As such, for a company like Toyota, operating activities will comprise of cash from the sale of cars, and cash expended on the purchase of inputs such as batteries.

Financing activities comprise of capital raising activities including the issue of shares, payment of dividends, raising of bonds, etc

Investing activities involves cash flows spent on the purchase of machinery and other flows spent investing, be it in physical assets or other businesses.

As such, when an investment in the form of a loan is made in another company, it is recorded as an investing activity in the statement of cash flows of the company who made the loan. In the same vein, when the investment is repaid, it will be recorded in investing activities.

However, in the books of the company who received the loan, it is a financing activity.

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