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What Is the Operating Cycle? How Is the Operating Cycle

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What is the operating cycle? How is the operating cycle used in classifying a business's assets and liabilities?


Definitions:

Break-Even Point

The financial level at which total revenues equal total expenses, resulting in no net profit or loss.

High-Low Method

A technique used in accounting and finance to estimate fixed and variable costs based on the highest and lowest levels of activity.

Factory Machine Hours

A measure of production time, indicating the total hours that machinery is operated in the manufacturing process.

Power Costs

The expenses incurred by a company for the electricity or energy used in its operations.

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