Life Cycle

Life Cycle

A life cycle can refer to any number of things in business, from a company’s assets to the business itself. An asset life cycle has an accounting definition that dictates assets depreciate from acqusition to end-of-life. Operationally the fixed asset life cycle starts when management discerns the need for an asset to research, planning and procurement. Once the asset has been procured, the next stage in the life cycle is operating the asset and ensuring it is adequately maintained. Once an asset has reached the end of its life (has no accounting or business value), the disposal stage is reached where the asset can be sold for scrap or to another company as an operating asset. A business life cycle refers to the evolutionary phases of a business. Like an asset life cycle, this too moves through stages from start-up, rapid growth (and rising profitability), slowing growth (lower growth in profits), maturity (declining sales growth and stagnant profits), to final stage (everything declines and the company loses its ability to compete profitably).

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