Business Activities
Candlefocus EditorOperating activities are activities that are necessary for a business enterprise to achieve its purpose and goals. Operating activities include daily operations such as product development, selling and marketing, production, managing inventory and staff, and providing customer service. It also encompasses activities associated with obtaining the capital, supplies and services needed by the company.
Investing activities involve the acquisition of financial assets for long-term value. These activities include the purchase of stocks, bonds and other long-term investments. Investing activities also include making loans, buying and selling real estate properties, and entering into joint ventures and other cooperative arrangements.
Financing activities involve obtaining capital and managing the company’s debt. This can include obtaining funds from issuing new shares, issuing bonds or notes, or obtaining loans from financial institutions. Financing activities also include repurchasing shares, repaying debt, providing dividends and other capital distributions to shareholders.
Business activities, most significantly operating activities, directly impact a company’s financial performance. Investing and financing activities are more strategic, helping the business leverage its capital to help achieve its goals. Companies must manage these activities with due diligence and in accordance with business systems and risk management policies. Together, these activities help the company achieve its operational, financial and strategic objectives, enabling it to generate long-term value for its shareholders.