What are operating activities in the statement of cash flows?

Operating activities in the statement of cash flows encompass the cash transactions that arise from the core business operations of a company, primarily involving the sale of goods and services. This reflects how much cash is generated or used in the day-to-day operations, including cash received from customers and cash paid to suppliers, employees, and other operating expenses. These activities provide insight into the company's operational efficiency and profitability, which is essential for assessing its overall financial health.

The other options detail different types of cash flows that are important in financial reporting but fall outside the scope of operating activities. Investments made in long-term assets relate to investing activities, which concern the purchase and sale of physical assets or investments. Financing activities involve cash flows associated with borrowing and repaying loans, issuing stock, and paying dividends. Lastly, cash generated from interest and dividends pertains to investment income, which, while it can influence cash flows, is not categorized under operating activities as it does not arise directly from the main business operations.