Normal operating activities definition

What are Normal Operating Activities?

Normal operating activities are the ongoing activities engaged in by a business to pursue its mission. Organizations typically track the profitability of their normal operating activities separately from their other activities, to determine whether their financial situation is fundamentally sound.

Examples of Normal Operating Activities

For example, the purchase of goods and their conversion into machinery would represent normal operating activities for a manufacturer. If the manufacturer were to also lend out its excess cash to borrowers, this would be considered outside of the range of its normal operating activities.