Operating activities are the day-to-day activities of a business such as sales, inventory management and payroll. Investing activities involve long-term investments in assets such as property, plant and equipment while Financing activities are transactions that either supply or use cash to meet the financial needs of a business such as loans, bonds, dividends and payouts. These three types of activities play an important role in ensuring the financial stability of a business. Understanding the differences between them helps businesses make informed decisions on how to invest their resources for maximum benefit.