Sustainable Growth Rate Definition & Application Wiki

Sustainable Growth Rate Definition & Application Wiki

Last Updated by WikiWealth

Short Definition

Sustainable growth rate (SGR) is the maximum rate at which a company can grow revenue without having to invest new capital. The higher the ratio, the better.

Long Definition

SGR = ROE * (1 – Dividend payout ratio)

Source: http://en.wikipedia.org/wiki/Sustainable_growth_rate