A study of cyclical variation is useful for the following purposes:
- It is used predicting turning points in business activities. With knowledge of cyclical variation a businessman prepares himself for facing the periods of recession, and depression by taking the appropriate decisions in advance.
- It is used for formulation of policies aimed at stabilizing the business of the periods of recovery and prosperity.
- It is used for getting an idea about the periodicity of the booms, and depression and accordingly, one can take timely steps for maintaining stable market for his products.
- It is very much used in finding the irregular variations by subtracting itself from the residue of short-term fluctuations.