This paper aims at developing cash flow based framework of financing pattern (of long term assets). The appealing features of the paper are two: first is the development of a set of new ratios “investment financing ratios: based on cash flow statement” and empirical testing of the same. As India is a prominent emerging market and third largest economy in the world, Indian companies have been taken as sample for empirical testing. As it is a new contribution to literature on ratios, primary data has been used to corroborate the findings from secondary data. The analysis highlights immense significance of cash flow statement in explaining financing pattern of long-term/fixed assets. Empirically, all the industry groups are financing about 30 % of their expansion/replacement needs from operating cash flows and about 25 % of the financing needs from cash flows from investing activities. Further, most of the firms are financing around 40 % of their annual investments in fixed assets by raising funds from external sources. Finally, the survey suggests preference for internal funds over external ones. Development of a cash flow based approach or use of flow concept to determine financing pattern of investments is perhaps the first of its kind attempts. Given the advantage of having a unique solution from use of cash flow information as opposed to a larger set of accounting information, these author developed cash flow ratios are expected to be of immense utility in serving as an alternate measure of assessing and financing decisions related to incremental investments undertaken by corporates.