The Effect of Financial Flexibility, Managerial Efficiency, and Life Cycle on the Financial Performance of Companies Listed in the Tehran Stock Exchange

The purpose of this study is the investage effect of financial flexibility and management efficiency by controlling the life cycle of the performance of a firm, eventually lead increasing the wealth of shareholders. This research answer two questions. First, whether financial flexibility and management efficiency affect performance and the second question is at what stage of the firm life cycle, financial flexibility, and management efficiency have the greatest impact on firm performance.

The method of this research is descriptive-correlational and quantitative data analysis is combined. The sample includes 84 firms in the period 2011 to 2021. Anthony and Ramesh's method is used for the operational definition of life cycle variables, the VOFF index is used for financial flexibility and the Demorjian method is used for managerial efficiency.

This study shows that financial flexibility and managerial efficiency have a positive and significant effect on firm performance. Also, after separating companies into different stages of the life cycle, management efficiency in the decline of the life cycle of companies has the greatest impact on performance, while in the growth stage and then maturity, management efficiency has the least impact. The greatest impact of financial flexibility on the company's performance is in the stages of maturity, decline, and growth respectively. The effectiveness of flexibility on company performance is in the stages of maturity, decline, and then growth respectively. Examining the simultaneous and interactive effect of financial flexibility and management efficiency on the company's performance shows that if the effect of one of them is weak and the other is effective and efficient, then it covers another like an umbrella.