Growth Potential Ratios

Financial Ratios

    Growth Potential Ratios

  • SUSTAINABLE GROWTH RATE

        It is the annual percentage of increase in sales that is consistent with a defined financial policy.

      G = RR * ROE

    Where:

    RR = retention rate = % of total net income reinvested in the company

    Or, RR = 1 - (dividend declared / net income)

    ROE = return on equity = net income / total equity

     

     

     

     

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