Abstract. The objective of this research in to examine the difference of financing
performance between prospector and defender firms. Four variable used as performance
measures as follows : income growth, sales growth, return on investment, and return on sales.
Life cycle theory is used to analyze the difference between from financing performance
measures. Four variables are used to determine prospector and defender firms : the ratio of
employees to sales, the price-to-book value ratio, the ratio of capital expenditure to market
value equity, and the ratio of capital expenditures to total asset. Based on common factor
analysis and the four other variables, 109 prospector and 109 defender firms are derived from
manufacturing companies listed at Indonesian Stock Exchange from 2011 until 2014. Data of
this research are analyzed using Mann-Whitney U Test. The results showed that each variable
and proxies that are used will be shown mixed results depending on the circumstances ,
conditions and organizational strategies used by these companies.
Keywords: prospector, defender, life cycle theory, financial performance