Financial Terms Turning Point

# Definition of Turning Point

## Turning Point

The trough or peak of a business cycle.

# Related Terms:

A variable that reaches a turning point (a peak or a trough) before the economy reaches a turning point.

## Peak

The upper turning point of a business cycle, where expansion turns into a contraction.

## Trough

The lower turning point of a business cycle, where a contraction turns into an expansion.

## Yield curve

The graphical depiction of the relationship between the yield on bonds of the same credit quality
but different maturities. Related: Term structure of interest rates. Harvey (1991) finds that the inversions of
the yield curve (short-term rates greater than long term rates) have preceded the last five U.S. recessions. The
yield curve can accurately forecast the turning points of the business cycle.

## Basis point

In the bond market, the smallest measure used for quoting yields is a basis point. Each percentage
point of yield in bonds equals 100 basis points. Basis points also are used for interest rates. An interest rate of
5% is 50 basis points greater than an interest rate of 4.5%.

## Basis Point

One one-hundredth of one percent

## Basis point

One hundredth of one percentage point, or 0.0001.

## Basis Point

One one-hundredth of a percentage point, used to express variations in yields. For example, the difference between 5.36 percent and 5.38 percent is 2 basis points.

## Bond points

A conventional unit of measure for bond prices set at \$10 and equivalent to 1% of the \$100 face
value of the bond. A price of 80 means that the bond is selling at 80% of its face, or par value.

## break-even point (BEP)

the level of activity, in units or dollars, at which total revenues equal total costs

## Breakeven point

The point at which total costs equal total revenue, i.e. where there is neither a profit nor a loss.

## breakeven point

The annual sales volume level at which total contribution
margin equals total annual fixed expenses. The breakeven point is only a
point of reference, not the goal of a business, of course. It is computed by
dividing total fixed expenses by unit margin. The breakeven point is
quite useful in analyzing profit behavior and operating leverage. Also, it
gives manager a good point of reference for setting sales goals and
understanding the consequences of incurring fixed costs for a period.

## Breakeven point

The sales level at which a company, division, or product line makes a
profit of exactly zero, and is computed by dividing all fixed costs by the average
gross margin percentage.

## Cash-flow break-even point

The point below which the firm will need either to obtain additional financing
or to liquidate some of its assets to meet its fixed costs.

## Delivery points

Those points designated by futures exchanges at which the financial instrument or
commodity covered by a futures contract may be delivered in fulfillment of such contract.

## Free-on-Board (FOB) Shipping Point

A shipping arrangement agreed to between buyer and
seller where title to the goods sold passes when the goods in question are delivered to a common
carrier. When goods are shipped FOB shipping point, revenue is properly recognized when the
goods are delivered to the common carrier.

## Order penetration point

The point in the production process when a product is
reserved for a specific customer.

## order point

the level of inventory that triggers the placement
of an order for additional units; it is determined based
on usage, lead time, and safety stock

## Outbound stock point

A designated inventory location on the shop floor between
operations where inventory is stockpiled until needed by the next operation.

## Point

The smallest unit of price change quoted or, one one-hundredth of a percent. Related: minimum price
fluctuation and tick.

## Point and figure chart

A price-only chart that takes into account only whole integer changes in price, i.e., a
2-point change. point and figure charting disregards the element of time and is solely used to record changes
in price.

## Point and figure chart

A financial chart usually used to plot asset price data.
Upward price movements are plotted as X’s and downward price movements
are plotted as O’s.

## point of sale (POS)

The terminal at which a customer uses his/her debit card to make a direct payment transaction. See also Interac Direct Payment.

## Point-of-use delivery

A delivery of stock to a location in or near the shop floor
adjacent to its area of use.

## Point-of-use storage

The storage of stock in a location in or near the shop floor
adjacent to its area of use.

## Price value of a basis point (PVBP)

Also called the dollar value of a basis point, a measure of the change in
the price of the bond if the required yield changes by one basis point.

## split-off point

the point at which the outputs of a joint process are first identifiable or can be separated as individual products

## Split-off point

The point in a production process when clearly identifiable joint costs
can be identified within the process.

## Stockpoint

An inventory storage area used for short-term inventory staging.