Identification of the phases of the life cycle of companies through the analysis of the cash flows statements

Abstract

This article analyzes the cash flow behaviors of Brazilian companies in the paper and cellulose industry in order to show at which life cycle phase they are and to define the profile of the Brazilian open companies of that industry between 2000 and 2005. This study is relevant because at the moment the Brazilian Congress is discussing Bill # 3.741, which proposes the establishment of the Cash Flow Statement as mandatory for open companies. This is a descriptive study that uses a sample based on the companies’ accessibility and comprises the six largest companies in the industry. Through a process of increasing adherence, these companies made their Cash Flow Statements available on the site of the Securities and Exchange Commission in the period covered by the study. According to the qualitative analysis of the results, most companies – Aracruz Celulose S.A., Votorantim Celulose e Papel S.A., Ripasa S.A. Celulose e Papel e Klabin S.A. – are at a stage of maturity. The quantitative comparison showed that in four of the six years observed, the maturity behavior prevailed: in four companies in 2000, in five in 2002, in four in 2004 and in three in 2005. Assuming that the sample can be considered to be representative of the industry, the conclusion is that the profile of the Brazilian open companies of the paper and cellulose industry between 2000 and 2005 is a profile of maturity. The research could be extended to other industries and to a longer period of time.

Key words: accounting, financial analysis, descriptive analysis, life cycle, profile.