Internal growth rate


Also found in: Acronyms.

Internal growth rate

Maximum rate a firm can expand without outside sources of funding. Growth generated by cash flows retained by company.

Internal Growth Rate

The maximum amount of growth a company can sustain without needing to borrow money, make a new issue of stocks, or otherwise obtain a new source of financing. One calculates the internal growth rate by taking the company's retained earnings and dividing by its total assets.
References in periodicals archive ?
Hypothesis 3a: The difference between the actual growth rate (AG) and the internal growth rate (IG) in first-generation family firms is higher compared with second- and third-generation family firms.
The first subsample contains only those firms that grow faster than their internal growth rate, and the second subsample consists of firms that grow faster than their sustainable growth rate.
Table 5 shows the OLS results based on a group of family firms that grow faster than their internal growth rate and a group that grows faster than their sustainable growth rate.
For both second- and third-generation family firms with faster growth than their internal growth rate, the extent to which they are willing to exceed this internal growth rate proves to be six to seven percentage points lower compared with first-generation companies.
Our results show that next-generation family firms are characterized by significantly lower differences between their actual growth rate and their internal growth rate compared to first-generation family firms (hypothesis 3a), which indicates that next-generation family firms avoid large increases in additional debt financing.
This decision table focuses on the financial factors of the internal growth rate, earnings per share, return on assets, and return on equity.
The Company's internal growth rates represent the weighted average, year-over-year revenue growth rates excluding the effects of foreign currency exchange rate fluctuations, acquisitions and divestitures, and certain other unusual items.
Double digit internal growth rates prior to 2009, together with stable debt levels, contributed to steady declines in leverage.
The Company's internal growth rates represent the weighted average, year-over-year growth rates of revenues excluding the effects of foreign currency rate fluctuations and acquisitions.
Manufacturers will have struggle to achieve internal growth rates of the past and will have to embark on cost-cutting and various other productive improvements in order to maintain, or even expand, market share in a highly, mature and saturated market.