A unified continued fraction theory which can be considered as a generalized feedback theory is established. A multiple cycle model consisting of many feedback constant matrices and many feed forward integral matrices is constructed. The outer feedback constant matrix corresponds to the first partial quotient matrix of the overall matrix continued fraction, whereas the outer forward integral matrix is corresponding to the second quotient matrix. Therefore, the partial quotient matrices of the continued fraction and the feedback and feed forward matrices of the system diagram are one-to-one correspondence in order. The influence of each matrix on the performance of the entire system depends on its position. The outer ones are much more important than the inner ones. A reduction model can be obtained by discarding certain inner matrices.