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Consilient Observer
September 26, 2023

Trading Stages in the Company Life Cycle

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September 26, 2023

Trading Stages in the Company Life Cycle

Consilient Observer

Trading Stages in the Company Life Cycle

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September 26, 2023

  • The corporate life cycle captures the stages of a company's existence, from birth to growth to maturation to eventual decline.
  • Understanding where a company is in its life cycle is helpful for assessing capital allocation, the cost of financing, corporate governance, and valuation.
  • In this report, we build on a framework for establishing stages within the life cycle and describe how to use the statement of cash flows to place companies in the appropriate stage.
  • We then show the average characteristics of companies in each stage, their rates of transition from one stage to another, and the historical average shareholder returns for companies in each transition cohort.
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