The average time intervening between the acquisition of materials or services and the final cash realization from those acquisitions.
Similar financial termsAnnual fund operating expenses
For investment companies, the management fee and "other expenses," including the expenses for maintaining shareholder records, providing shareholders with financial statements, and providing custodial and accounting services. For 12b-1 funds, selling and marketing costs are included.
Short-run operating activities
Events and decisions concerning the short-term finance of a firm, such as how much inventory to order and whether to offer cash terms or credit terms to customers.
The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk.
Fixed operating costs, so-called because they accentuate variations in profits.
Short-term, cancelable lease. A type of lease in which the period of contract is less than the life of the equipment and the lessor pays all maintenance and servicing costs.
Operating profit margin
The ratio of operating margin to net sales.
Degree to which exchange rate changes, in combination with price changes, will alter a company's future operating cash flows.
Operating cash flow
Earnings before depreciation minus taxes. It measures the cash generated from operations, not counting capital spending or working capital requirements.
Net operating margin
The ratio of net operating income to net sales.
Net operating losses
Losses that a firm can take advantage of to reduce taxes.
The economic cycle are predictable long-term pattern changes in national income. As for business cycles, the economic cycle has four (similar) stages:
After a recession, an expansion can start again. Some economists believe that major stock price movement patterns precede the stages of the economic cycle.
The patterns of fluctuation in growth patterns experienced by business caused by overall econimoc and financial trends, competitive forces and the nature of supply and demand. Cycles are predictable in patterns but not always in durations.
The frequency with which an asset is replaced by an equivalent asset.
The time it takes to bring new and/or improved products to market.
The period between the 2 latest highs or lows of the S&P 500, showing net performance of a fund through both an up and a down market. A market cycle is complete when the S&P is 15% below the highest point or 15% above the lowest point (ending a down market). The dates of the last market cycle are: 12/04/87 to 10/11/90 (low to low).
Repetitive cycles of economic expansion and recession.
Cash conversion cycle
The length of time between a firm's purchase of inventory and the receipt of cash from accounts receivable.
In general, the time between cash disbursement and cash collection. In net working capital management, it can be thought of as the operating cycle less the accounts payable payment period.