Sustainable growth rate

What is the Sustainable growth rate?

The Sustainable growth rate is the maximum percentage of growth that a company can support by operating on its current resources without additional funding.

Formula:

Return of average total equity * (1 - Dividend payout ratio / 100)

What does Sustainable growth rate mean?

Assume that the Return of average total equity of the company is equal to 20%, and the dividend payout ratio is 30%. In this case, SGR = 0.2 * (1-0.3) = 0.14 or 14%. That is, with its current resources, the company can support a maximum growth of 14%. For larger growth, it will probably need additional financing.

The constant growth of this indicator suggests that a company's profits and expenses are all currently being managed to maximize effectiveness and efficiency.

Home Screener azioni Screener forex Screener cripto Calendario economico Come funziona Caratteristiche Grafico Costi Invita un amico Regolamento Centro di supporto Soluzioni per broker & siti web Widget Librerie grafiche Libreria grafica leggera Blog & Novità Twitter
Profilo Impostazioni profilo Account e fatturazione Amici invitati Coin I miei ticket di supporto Centro di supporto Idee pubblicate Follower Seguiti Messaggi Privati Chat Esci