Difference between revisions of "Sustainable Growth Rate"
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Latest revision as of 19:25, 27 August 2020
The sustainable growth rate is the maximum growth rate, measured in sales, that a company can afford without adding extra external capital. The formula is:
SG =
Where
If the actual growth rate is bigger than the sustainable growth rate: Cash Absorber If the actual growth rate is smaller than sustainable growth rate: Cash Generator
