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#cfa-level-1 #reading-23-financial-reporting-mechanics
Understanding the nature of activities helps the analyst understand where the company is doing well and where it is not doing so well.
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2. THE CLASSIFICATION OF BUSINESS ACTIVITIES
those activities related to obtaining or repaying capital. The two primary sources for such funds are owners (shareholders) or creditors. Examples include issuing common shares, taking out a bank loan, and issuing bonds. <span>Understanding the nature of activities helps the analyst understand where the company is doing well and where it is not doing so well. Ideally, an analyst would prefer that most of a company’s profits (and cash flow) come from its operating activities. Exhibit 1 provides examples of typical business activities and how


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