what are business activities 
business activities refer to all actions a business undertakes with the primary aim of generating profit this general term encompasses all the economic activities carried out by a company in its daily operations a company s cash flow statements categorize these activities into three main types operating investing and financing 1 each type is crucial in a company s continuous efforts to create shareholder value understanding business activitiesbusiness activities are categorized into three main types operating investing and financing these activities are detailed in the cash flow statement which reconciles net income from an accrual basis to cash flow the cash flow statement starts with net income from the income statement and adjusts for changes in the balance sheet to reflect actual cash inflows and outflows to determine cash flow non cash items previously deducted from net income are added back while non cash items that were added to net income are subtracted the result is a report that gives the investor a summary of the company s business activities on a cash basis segmented by type of activity 3the first section of the cash flow statement is cash flow from operating activities this section includes various items from both the income statement and the current portion of the balance sheet the cash flow statement adjusts certain non cash items such as depreciation and amortization it also incorporates changes in balance sheet accounts like accounts receivable and accounts payable adjusting for their previous impacts on net income these line items impact the net income on the income statement but don t result in a movement of cash in or out of the company if a company shows negative cash flows from operating activities it indicates that the company is financing its operations through either investing or financing activities consistently negative operating cash flow is rare outside of nonprofit organizations which often maintain endowments that act as financial buffers to reduce the risk of revenue fluctuations 4investing activities are detailed in the second section of the statement of cash flows these are business activities that have been capitalized for more than one year the purchase of long term assets such as equipment or property with a useful life of more than one year is recorded as a cash outflow in this section 5 likewise real estate sales are shown as a source of cash the line item capital expenditures is considered an investing activity and can be found in this section of the cash flow statement the final section of the cash flow statement covers financing activities or any business activity related to raising funds or managing financial obligations this includes transactions where a company issues new shares to raise capital for various projects secondary offerings and debt financing it also details cash outflows for dividends share repurchases and interest payments 