The effect of the growth rate and life cycle of food industry companies on their profitability on the Tehran stock exchange
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Abstract
Increasing attention to the food industry and the entry of companies into the stock market is one of the most important factors influencing private sector investments and foreign investors, which will increase profitability, added value, and growth in the agricultural sector. This study attempts to examine the effect of growth rate of an asset (GRA), growth rate of sales (GRS), and growth rate of employment (GRE), financial constraints (liquidity (LIQ) and cash flow), and the company's life cycle on the profitability of 21 food industry companies listed the stock exchange from 2010 to 2019. The results show that the GRE, GRA, and GRS as corporate growth variables and cash flow variable as financial constraints have a positive and significant effect and LIQ as a financial constraint has a negative and significant effect on return on asset as a corporate profitability index. Meanwhile, the maturity stage of the company's life cycle compared to the growth stage as a Dummy variable has a positive and significant effect on the profitability of food industry companies. Therefore, if managers are looking for sustainable profits, they should also pay attention to the company's growth and its constituents.
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