BUSINESS CYCLE

Business Cycle (or economic cycle) refers to economy-wide fluctuations in production or economic activity over several months or years. These fluctuations occur around a long-term growth trend, and typically involve shifts over time between periods of relatively rapid economic growth (an expansion or boom) and periods of relative stagnation or decline (a contraction or recession). A business cycle occurs due to the variations that an economy experiences over time resulting from changes in economic growth. The economy has regular and periodic waves cycle and lasting for several years, has few members today. Business Cycle approach remains useful because it is an easy way to introduce a number of macroeconomic topics, including the adjustment process that remains central in macroeconomics.

There are four (4) stages that describe the business cycle. The Contraction when the economy starts slowly down. The Through when the economy hits bottom, usually in a recession. The Expansion when the economy starts growing again. And the Peak when the economy is in a state of irrational exuberance.

Revenue Cycle is a process businesses use to describe the financial progression of their accounts receivables from the very beginning, when they first acquire products if they’re product based, until they get paid, if they get paid. And it is the process of selling the product. And the product will sell, and if they collect in full at the point of the sale and record the purchase product the revenue cycle is complete.

Expenditure Cycle business needs materials in order to produce their products. However, before purchasing those materials, a company must determine the costs of buying the materials and the amount of inventory needed in order to complete the finished product on time and for a reasonable cost. And the expenditure cycle begins with the granting of permission to make a particular purchase.

Conversion Cycle in management accounting, the cash conversion cycle (CCC) measures how long a firm will be deprived of cash if it increases its investment in resources in order to expand customer sales. And in conversion cycle more on the flow chart so that we know if the cash will increase or not. And to control practices and procedures required in the conversion cycle

Treasury Cycle is the timing and frequency of the various maturity or treasury instruments; Transaction include those relate to financing the operations of the business. And needs to be evaluated more.

Posted By: Sarah Jean Icoy