What are cyclical businesses and how are they affected by economic cycles?
Understand the Problem
The question appears to explore the concept of cyclical businesses and their vulnerability to economic changes. It discusses how certain sectors are more affected by economic cycles compared to others, specifically mentioning businesses like retail and construction.
Answer
Cyclical businesses are more vulnerable to changes in the business cycle, experiencing significant impacts during economic booms and slumps.
Cyclical businesses are more vulnerable to changes in the business cycle, experiencing significant impacts during economic booms and slumps.
Answer for screen readers
Cyclical businesses are more vulnerable to changes in the business cycle, experiencing significant impacts during economic booms and slumps.
More Information
These businesses typically include sectors like fashion retailers, tour operators, construction, electrical goods, house builders, restaurants, advertising, and overseas infrastructure firms.
Tips
A common mistake is to not distinguish between cyclical and non-cyclical (defensive) businesses. Cyclical businesses are highly dependent on economic cycles, while non-cyclical businesses are more stable across cycles.
Sources
- Cyclical Industry: What It Is, Characteristics, and Examples - investopedia.com
- Cyclical Industries: What Are They and How Do They Work? - indeed.com
- The web page with info on - Example Source - juliusbaer.com
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