Company life cycle models have been the focus of researchers’ attention for decades, resulting in numerous definitions and determination of stages. Managers are striving to make appropriate strategic decisions at the right time to maximize opportunities linked to various life cycle stages. Assessing a company’s life cycle and determining the stage of the cycle allows us to predict a company’s future development and to prevent crises or even the company’s early termination. In recent years, there has been increased interest in the life cycle assessment of products. However, as a corporate life cycle is longer than that of a product, it still definitely deserves attention – mainly in the field of quantitative criteria. The aim of this paper is to propose quantitative variables to determine a company’s life cycle following two requirements: (1) the variables are derived from publicly available financial statements; and (2) the classification method is suitable for a large sample size including non-listed companies in the stock exchange. Our study shows that our three variables (capital expenditures, return on equity, and sales growth) are suitable for stage classification for each firm-year under the condition of following several steps: counting industry quintiles and/or definition of boundaries, score assignment to stages, designing composite score and sample selection. Based on descriptive statistics of each life cycle stage it is possible to assess the variables used in the context of the further strategic direction of the company. To determine the persistence of enterprises in the defined stages, a transition matrix for the four future years was performed, which showed that companies in the growth and maturity stages will be sustained in these two phases in the vast majority of cases. Finally, we discuss the limitations of the study and further research directions.
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