TY  - JOUR
AB  - Highlights the operating cycle, its importance, and reviews basic
relationships related to the cycle. In particular, it focuses on capital
“flow through”, invested capital, capital at risk, and
economic returns generated relative to capital employed. Reveals an
amplification effect that results from improvements in the management of
the cycle, that benefit traceable to a reduction in operating risk
allowing incremental benefits from financial leverage. Suggests specific
actions to take with respect to the cycle that will improve the value of
your firm. Shows that small improvements in operating factors within the
cycle yield amplified benefits to the firm. The discussion ignores taxes
except in instances when tax effects are important. This does not
detract from the discourse or conclusions. Reveals that increases in
firm value that result from improved management of the operating cycle
stem from several sources: greater levels of economic returns from
operations; a reduction in operating risk; less capital invested and at
lower risk; lower cost of capital; and increased tax benefit.
VL  - 30
IS  - 4
SN  - 0025-1747
DO  - 10.1108/00251749210014725
UR  - https://doi.org/10.1108/00251749210014725
AU  - Groth John C.
PY  - 1992
Y1  - 1992/01/01
TI  - The Operating Cycle: Risk, Return and Opportunities
T2  - Management Decision
PB  - MCB UP Ltd
Y2  - 2024/09/21
ER  -