Discuss the three business activities of financing, investing, and operating.

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Answer:

Operating activities

Operating activities are those activities that are related to day to day operations of the business.

In other words, operating activities are the functions of the business that are directly related to the production of goods or rendering of services. These are the core and main business activities.

Example: receipt of customers, payments to suppliers, taxes paid, salaries paid, etc.

Investing activities

Investing activities are those activities that are related to non-current assets and investments of the company.

Example: Investments purchased, dividends received, buildings purchased, interest received, etc.

Financing activities

Financing activities are those activities that are related to procurement or acquisition of funds.

These are those activities that are related to debt and equity.

Example: shares, debentures issued, interest payments, loans from a bank, dividend payments, etc.

In case of any doubt, please feel free to comment.

ekkarill92 answered 1 year ago

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