Internal Growth Rate

Written by Jerry Ratzlaff on . Posted in Manufacturing Engineering

Internal growth rate, abbreviated as IGR, a dimensionless number, is the highest rate of growth a company is able to achieve without using any external funds.

 

Internal Growth Rate Formula

\(\large{ IGR =  \frac{ RR }{ ROA }   }\)  

Where:

\(\large{ IGR }\) = internal growth rate

\(\large{ RR }\) = retention ratio

\(\large{ ROA }\) = return on asset

 

Tags: Equations for Manufacturing