A Review of the Classification of Enterprise Life Cycle

Due to the different life cycles of companies, there are significant differences in company size, growth, financing constraints, financing channels, growth, investment opportunities, competitive environment, and operational and financial risks. The company’s life cycle can be studied by micro-enterprises. Scholars in the fields of behavior, financial accounting, management accounting, and capital markets provide a dynamic perspective. Therefore, how to divide and measure the life cycle of a company is particularly important. This paper gives a detailed analysis of the division of the life cycle of domestic and foreign companies and their measurement methods. It has a certain guiding significance for interdisciplinary research in financial accounting, management accounting, and capital markets based on the enterprise life cycle theory.


Introduction
Just as the birth, growth, maturation and aging of life cycle of the organism, the enterprise organization also has its own life cycle, from the creation, to the continuous development and growth, to maturity and stability, and finally to the final recession. Each stage of enterprise development will have its own specific and development problems. This growth stage and process is called the enter-

Business Life Cycle Theory
There is a life cycle in the development of everything in the world, and companies are no exception. The life cycle of an enterprise is like a pair of invisible giants, and it always influences the trajectory of enterprise development. The so-called "enterprise life cycle" refers to the fact that an enterprise has the same life cycle as human beings and other organisms. It generally experiences different stages such as entrepreneurship, growth, maturity, and recession. Enterprises at different stages will have different characteristics and experience external and internal different risks [2].

Entrepreneurship
In the initial period, the development of the company depends on the recognition of the market for its products or services. The company is still in the stage of exploration and the operating risk is extremely high. At this stage, the company does not need to carry out mergers and acquisitions, nor does it have the conditions for implementing mergers and acquisitions.

Growth
Growth period is the stage of high-speed development of the company. The company's products or services have just gained market recognition. Companies need to expand their production capacity to seize the market, so as to gain more

Maturity
The mature period is the most robust stage for a company's development. The

Recession
During the recession, the company's products have been eliminated from the market, and various alternatives have forced companies into bankruptcy. At this stage, companies can inject high-quality assets through mergers and acquisitions into promising industrial sectors. However, the enterprises in the recession period may not fully understand the operating problems existing in the new industry field, and they are unable to achieve successful mergers and acquisitions because of their traditional concepts. In addition, during the recession period, the company's operating cash flow is not sufficient and its financing capacity is limited. If there are unexpected problems in the operation of the target company, its response capacity is extremely limited. In other words, the capital issue will further reduce the decline of enterprises in the recession period to save themselves through mergers and acquisitions.

Life Cycle Division and Measurement Methods
There are two methods, quantitative and qualitative, that divide the life cycle of a company. The qualitative approach is to match the characteristics of the com-  DeAngelo (2006) found that the higher the company's value of retained earnings/net assets (retained earnings/total assets) is, the more likely it is to pay div-  [7]. By comparing the company's characteristics of the ratio in each range, the A company with a TE of less than 0.1 is defined as a growth company, and a company with an RE/TE greater than or equal to 0.1 and less than 0.5 is defined as a mature company. Zhao Puhe and Sun Aiying (2005) and Tang

Comprehensive Index Method
For the first time, Anthony and Remesh (1992) used the variable scoring method of sales revenue growth, dividend payment, capital expenditure, and age of the company to divide the life cycle of the company. Because there are many investment opportunities in the growth stage, the company has a higher capital expenditure rate in the growth period and a higher growth rate in sales revenue.
With the development of enterprises, retained earnings gradually show a growth trend. In the growth period, a large amount of surplus funds are put into the development of enterprises, so that retained earnings are relatively low during this period, and retained earnings accompany the company's continuous development and development. Mature, the growth of the company began to decline, but the continued increase in retained earnings. However, after the company enters a recession period, retained earnings may be used for new investment by the enterprise, allowing the company to grow for the second time, but it may not be used for new investment and accumulate more retained earnings [14]. After Anthony and Remesh, Wayne (2002)

Comment on the Measurement Method of Enterprise Life Cycle
Due to the advent of the era of big data, empirical research has become the cur- It can be seen that the cash flow portfolio method can better overcome the deficiencies of the univariate method that only divides the enterprise life cycle from a single level and does not need the assumption that each factor has a linear relationship with the life cycle as the integrated index method. Therefore, the author thinks that the use of the cash flow portfolio method is more rational and scientific.