A business does three things. It raises money.
and then it uses that money to acquires assets to use.
And it uses them to make a profit.
Depending on what a business does, it will use assets in a different way.
A business that performs a service will use assets to do things for other people.
A business that manufactures things will use assets to make other things to sell.
When a business uses it's assets to make a profit, it is called its OPERATING ACTIVITIES.
Before a business can engage in any OPERATING ACTIVITY, it must first acquire the assets
to use in it. The process of buying assets to use in a business is called the INVESTING
Before a business can ever INVEST in any assets to use in a business, the business must have
money to spend. What happens if a business doesn't have money? Where can it get money?
The process of raising money through investors or lenders is called a business's FINANCING
As a review, A business engages in three activities.
These activities are Financing Activities, Investing Activities, and Operating Activities.
Financing is raising capital, to then invest in assets, to then use in it's operations,
A business must be skilled at each of these activities if it wants to be successful and