Sustainable growth rate

Also found in: Medical, Acronyms.

Sustainable growth rate

Maximum rate of growth a firm can sustain without increasing financial leverage.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Sustainable Growth Rate

The amount that a company or economy can grow without having to increase borrowing. A sustainable growth rate is desirable because it satisfies the needs of the company or economy without increasing its fixed costs (in this case, borrowing costs), which can create significant problems if the growth slows or begins to decline.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Amouzesh N, Moeinfar Z, Mousavi Z (2011) Sustainable growth rate and firm performance: evidence from Iran stock exchange.
"The sustainable growth rate is the biggest issue in the long run that we're trying to deal with," said Gene Shelby, an emergency physician at National Park Medical Center in Hot Springs and president of the Arkansas Medical Society.
Passed by Congress in 1997, the SGR (sustainable growth rate) was meant to slow the growth in Medicare spending.
The Sustainable Growth Rate formula links physician payments to the gross domestic product and critics say it does not take into account the actual costs of medical practice.
In 1997, the Balanced Budget Act created the Sustainable Growth Rate (SGR) system to control Medicare physician spending.
Congress in late March, Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, noted that economic growth in the United States has slowed in recent quarters, reflecting in part the economy's transition from the rapid expansion in preceding years to a more sustainable growth rate.
Solid expansion in architectural billings in February, at a cooler yet perhaps more sustainable growth rate, mirrors recently reported statistics in employ-ment and gross domestic product.
Concerns were raised about the system Medicare uses to determine annual changes to physician fees--the sustainable growth rate (SGR) system--when it reduced physician fees by almost 5 percent in 2002.
Georgas insisted that the stock's current valuation doesn't reflect Colgate's sustainable growth rate and level of risk.
While ministers estimate the UK's long-term trend or sustainable growth rate to be about 2.75pc.
While ministers estimate the UK's long term trend or sustainable growth rate to be about 2.75 per cent, GDP has risen at an average annualised rate of 1.8 per cent during the past two years.

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