Activity Capacity

DEFINITION of 'Activity Capacity'

The degree to which a particular action is expected to perform. Activity capacity refers to an activity's upper threshold of performance based on historical results and future expectations. An example could be the rate of output for a machining activity measured in terms of cycles per hour. Activity capacity involves a specified set of resources and an extended period of time, taking place under normal or expected operating conditions.

BREAKING DOWN 'Activity Capacity'

Activity capacity measures an activity's anticipated performance, taking into consideration such variables as the availability of space, machinery, labor and materials. Activity capacity can be measured in terms of dollars, labor hours, weight, size or any other unit of measure in which an activity is performed.

RELATED TERMS
  1. Capacity Management

    The management of the limits of an organization's resources, ...
  2. Capacity Requirements Planning ...

    An accounting method used to determine the available production ...
  3. Capacity Utilization Rate

    A metric used to measure the rate at which potential output levels ...
  4. Fiscal Capacity

    In economics, the ability of groups, institutions, etc. to generate ...
  5. Operating Activities

    A company's typical daily processes that generate income. Operating ...
  6. Activity Center

    A pool of activity costs associated with particular processes ...
Related Articles
  1. Fundamental Analysis

    Calculating the Capacity Utilization Rate

    Capacity utilization rate is a ratio used to compare a current usage level against a maximum potential level.
  2. Mutual Funds & ETFs

    Active Share Measures Active Management

    A 2006 study proves the effectiveness of a new way of sizing up your portfolio manager.
  3. Trading Strategies

    Active Managers' Market-Beating Claims Debunked

    New, more precise mutual fund style analysis shows active management still underperforms over time.
  4. Options & Futures

    Does Slow-And-Steady Win The Investing Race?

    Sometimes the best investing method is a mix of active and passive investing.
  5. Fundamental Analysis

    Cash Flow From Financing Activities (CFF)

    Cash flow from financing activities is typically the third and final section of the statement of cash flows. It shows changes to cash resulting from activities such as issuing stocks and bonds ...
  6. Trading Strategies

    4 Common Active Trading Strategies

    Active trading entails buying and selling securities with the intent of profiting from short-term price movements.
  7. Trading Strategies

    How To Outperform The Market

    Active trading is an investing style that aims to beat the market. Find out how it works, and whether it will work for you.
  8. Investing Basics

    The Basics Of Value Chain Analysis

    Value chain analysis establishes an action plan to understand and implement actvities that create values to a firm's clients, resulting in firm profits.
  9. Retirement

    Is Passive Investing Effective for Retirement Savings?

    Learn about the differences between active and passive investing for those approaching retirement. Discover how passive investing is gaining popularity.
  10. Products and Investments

    Passive vs. Active Management: Which is Best?

    Portfolio performance is as much about picking asset classes as picking stocks. Timing the market, however, is something else altogether.
RELATED FAQS
  1. How can I use cash flow investing activities to determine if a company is growing?

    Learn how to use the sources and uses of a company's cash flow from investing activities to determine whether that company ... Read Answer >>
  2. What is the purpose of drawing up a cash flow statement?

    Understand the reasons behind why a company draws up a cash flow statement. Learn how it is used to understand the trends ... Read Answer >>
  3. How long should an expansionary economic policy be implemented?

    Finding the optimal time period to end expansionary economic policy is an urgent issue; the key is found with capacity utilization. Read Answer >>
  4. Why should I dig further if I find a company has positive cash flow from investing ...

    Understand why it's important to dig into a company's sources and uses of cash if it has a positive cash flow from investing ... Read Answer >>
  5. How is productivity calculated?

    Learn about productivity, what productivity measures and how to compute a company's productivity level by measuring its outputs ... Read Answer >>
  6. What is the difference between passive and active asset management? (SPY)

    Find out about active asset management, passive asset management, how these strategies are utilized and the differences between ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center