Analysis and Selection of Enterprise Financial Strategies under Different Life Cycles

The theory of enterprise life cycle provides a systematic perspective for analyzing the dynamic development of enterprises, which divides the evolution of enterprises into four stages: start-up stage, growth stage, maturity stage and recession stage. Based on the life cycle framework, this paper deeply analyzes the differences and core contradictions of financial characteristics in each stage, and puts forward the adaptive financial strategy model. The results show that the strategy of "low debt, high equity and zero distribution" should be adopted to ensure the survival in the start-up stage; the scale expansion should be supported by equity-debt financing in the growth stage; the endogenous financing and high cash dividend should be used to balance the shareholder return in the maturity stage; the transformation should be realized by asset divestiture and strategic restructuring in the recession stage. The research value lies in the construction of the three-dimensional linkage mechanism of "financing-investment-allocation", which provides a theoretical basis for enterprises to dynamically adapt to financial strategies and avoid periodic risks.

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Publication Details

Journal
International Journal of Finance and Investment
Published
2025-08-27
DOI
https://doi.org/10.54097/pwsxb851
Primary Topic
Corporate Finance and Governance
Type
article
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article

Analysis and Selection of Enterprise Financial Strategies under Different Life Cycles

Zhien Liu
International Journal of Finance and Investment
Corporate Finance and Governance
article

Analysis and Selection of Enterprise Financial Strategies under Different Life Cycles

Zhien Liu
article en

Abstract

The theory of enterprise life cycle provides a systematic perspective for analyzing the dynamic development of enterprises, which divides the evolution of enterprises into four stages: start-up stage, growth stage, maturity stage and recession stage. Based on the life cycle framework, this paper deeply analyzes the differences and core contradictions of financial characteristics in each stage, and puts forward the adaptive financial strategy model. The results show that the strategy of "low debt, high equity and zero distribution" should be adopted to ensure the survival in the start-up stage; the scale expansion should be supported by equity-debt financing in the growth stage; the endogenous financing and high cash dividend should be used to balance the shareholder return in the maturity stage; the transformation should be realized by asset divestiture and strategic restructuring in the recession stage. The research value lies in the construction of the three-dimensional linkage mechanism of "financing-investment-allocation", which provides a theoretical basis for enterprises to dynamically adapt to financial strategies and avoid periodic risks.

International Journal of Finance and InvestmentVol. 3(2)
Beijing Foreign Studies University (CN), Beijing International Studies University (CN)
Openalex Percentile: Top 66%
Corporate Finance and Governance
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Analysis and Selection of Enterprise Financial Strategies under Different Life Cycles — Zhien Liu · International Journal of Finance and Investment (2025) | TGRS Research Map | TGRS