Circuit theory is a set of techniques used describe the flow of energy around an electrical loop. The theory is comprised of a number of different laws, ideas, and definitions. These include Ohm’s law and Kirchhoff’s lawa, which describe the relationship between current, voltage, and resistance. In some cases, the techniques may also refer to hydraulic or pneumatic circuits, which involve fluid and gas respectively. An electrical circuit is formed using a number of components, such as batteries, wires, capacitors, resistors and switches.

Electrical current, at a microscopic level, is the flow of electrons around a circuit. Electrons are negatively charged particles. This is the fundamental reason why "work," i.e., the name for energy given to or performed on an object in physics, can be transmitted by an electric circuit. Circuit theory is a collection of laws and techniques that allow people to devise circuits for specific goals and purposes.

Any circuit is built using two types of components. These are called the “active” components, which supply the energy, and the “passive components” which use the energy. In the case of electronic circuit theory, the active components are usually batteries or generators.

There are a number of passive electric components which are important in circuit theory. A basic “test” circuit is usually made up of a battery, a passive component such as a lamp, and a variable resistor. The variable resistor can be adjusted at any time, which allows for the current through the component to be varied. Other components that are commonly used in electric circuits include diodes, which allow electricity to flow in only one direction, and capacitors, which can store an electrical charge and discharge it when required.

A cornerstone of circuit theory is Ohm’s law, which is a simple formula for working out the relationship between current, voltage, and resistance in a circuit. The formula is written as "current equals voltage divided by resistance." In other words, the resistance of a conductor is independent of the current. This formula is often used in the techniques to determine how much resistance might be required to achieve a certain level of current.

Kirchhoff’s laws are also an important part of circuit theory. There are several laws, each describing conservation of energy and charge in a circuit. Conservation laws are among the most important in physic as a whole, and Kirchhoff’s laws apply these general principles to electronic circuits.