Abstract

This study investigated the effect of life cycle stages of listed firms in the Tehran stock exchange on their performance evaluation criteria. Based on analysis 685 firm-year data companies are classified into three groups including firms in growth, maturity and decline stages. After removing the firms which weren’t concern with life cycle model, 86 firms were selected to test two main hypotheses of the research.
The results showed that the Tobin’s Q and ROA performance evaluation criteria were different in various life cycle stages. Moreover, examination by LSD test also revealed that Tobin’s Q performance evaluation criterion in growth stages was significantly different from those in decline stages because the acquisition of main assets in past time, their assets book value was low and respectively their Tobin’s Q was high. The same result was also true for ROA ratio.