COURSE OVERVIEW:

The business cycle, also known as the economic cycle or trade cycle, is the downward and upward movement of gross domestic product (GDP) around its long-term growth trend. The length of a business cycle is the period of time containing a single boom and contraction in sequence.

These fluctuations typically involve shifts over time between periods of relatively rapid economic growth (expansions or booms) and periods of relative stagnation or decline (contractions or recessions).

Business cycles are usually measured by considering the growth rate of real gross domestic product. Despite the often-applied term cycles, these fluctuations in economic activity do not exhibit uniform or predictable periodicity. The common or popular usage boom-and-bust cycle refers to fluctuations in which the expansion is rapid and the contraction severe.

Businesses differ to such a huge degree that each one is truly unique, and yet they all go through one simple process in much the same way. Which is called the business cycle. They produce and deliver a product or service, they invoice the customer, they pay their bills, they get paid by their customers, and they do the books.

Business cycles can greatly affect business decisions. Understanding where the economy is in the business cycle can help businesses make informed decisions about investment, hiring, and production. For example, during an expansionary phase, businesses may increase investment in new projects, expand their operations, and hire more employees. Conversely, during a recessionary economic cycle phase, businesses may cut back on investment, reduce production, and lay off workers. Businesses may also alter their pricing strategies based on the state of the economy, such as lowering prices during a recession to maintain sales. By being aware of the business cycle, businesses can make better decisions, improve their competitiveness, and increase their growth rate and chances of success. 

Changes in the business cycle are primarily caused by four factors: business decisions, interest rates, consumer expectations, and external problems. Businesses that expand production contribute to an expansion by boosting the overall supply. When they cut back on manufacturing, supply also goes down, which could lead to a contraction. When interest rates increase, both firms and consumers are less likely to borrow money to make purchases, which slows the economy. Lower interest rates make loans more affordable and increase the likelihood of an economic expansion. The level of consumer spending, a key driver of aggregate demand, is influenced by how people feel about the state of the economy. External factors, such as calamities or wars abroad, might occasionally have an impact on the overall supply.

In this course, we explain the meaning of Business Cycle and have set up an imaginary company to demonstrate the business cycle process. You will see a full pictorial representation of the finances of this business. Including the setting up a company, the moving balance sheet, the cash and profit statement, how to run the business on the opening month, the profit and loss (P&L) account, the balance sheet, the first and second months of the business cycle and how to do the books.

LEARNING OUTCOMES:

By the end of this course, you will be able to understand:

·       What is a business cycle?

·       How to set up a company?

·       What would you need to start a new business?        

·       The moving balance sheet

·       The prudence of accountants

·       What is our greatest asset?

·       Buying raw materials

·       How to create value?

·       When is a sale considered a sale?

·       The delivery of goods and payment arrangements

·       Cash and profit in the business

·       Receiving customers’ payment

·       What is owners’ equity/funds and why is it a liability?         

·       Setting up and running a business

·       Month 1 business cycle

·       Recruitment costs

·       Cash payment for raw materials

·       Bidding for orders

·       Receiving payment on 60 days

·       Paying the bills

·       The profit and loss (P&L) account 

·       The balance sheet       

·       Month 2 business cycle        

·       Updating records of money owed by customers

·       Money owed to suppliers

·       When is a purchase a purchase?

·       Going to the bank for a loan

·       Paying bank interest

·       Balancing the books    

·       Paying outstanding costs

COURSE DURATION:

The typical duration of this course is approximately 2-3 hours to complete. Your enrolment is Valid for 12 Months. Start anytime and study at your own pace.

COURSE REQUIREMENTS:

You must have access to a computer or any mobile device with Adobe Acrobat Reader (free PDF Viewer) installed, to complete this course.

COURSE DELIVERY:

Purchase and download course content.

ASSESSMENT:

A simple 10-question true or false quiz with Unlimited Submission Attempts.

CERTIFICATION:

Upon course completion, you will receive a customised digital “Certificate of Completion”.