Sustainable Growth Measures

 Self-Paced Overview


It's clear from the previous example that actual growth is consistently above sustainable growth. What does that mean?

Sustainable Less Than Actual

  • If sustainable growth is less than actual growth over a protracted period, the company cannot sustain such activity without "funding" that growth. Either they need to plow more profits into the company, increase net profit margin or turnover performance, or "fund" from risky sources such as increasing the debt level.

Sustainable Greater Than Actual

  • When sustainable growth is greater than actual growth over an extended time, the company has the potential of ratcheting up growth. If they consistently fall below sustainable growth, they are passing up returns for shareholders. is maintained by Dr. Sharon Garrison
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