Definition for : Business cycle

Business cycle covers the time from the purchase of Raw materials till the sale of the Finished goods produced from these Raw materials. Customer credit and Supplier credit influence the length of the business cycle. The business cycle forms the basis of the company's Wealth. It consists in both: Wealth creation (products and services sold, i.e. products and services whose worth is recognised in the Market) and Wealth destruction (consumption of Raw materials or goods for resale, use of labour, use of external services, such as transportation, taxes and other duties). The very essence of a business is to create Wealth by means of its business cycle.

(See Chapters Chapter 2 Cash Flows and Chapter 4 Capital employed and invested capital of the Vernimmen)

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