What is a key expectation related to Operating Activities?

Operating activities refer to the primary revenue-generating activities of a business, including transactions related to the sale of goods and services, and the collection of cash from customers. It is primarily through these activities that a business sustains its operational viability and generates profits.

The expectation that operating activities would typically generate a positive cash flow is linked to the overall goal of a business to create value and generate sufficient funds to continue operations and meet financial obligations. Consistent positive cash flow from operating activities is an indicator of a company's financial health, enabling it to invest in growth, pay dividends, and cover various operating expenses.

While some cash outflow is expected as part of the normal course of business operations, the overall trend should be positive cash flow in the long term. Operating activities are indeed crucial, unlike investing activities which are essential but secondary in comparison. It is also misleading to suggest that operating activities are only relevant in non-profit organizations, as all businesses (both for-profit and non-profit) depend on their operating activities to sustain their operations.