Internal Growth Rate (IGR) is the maximum growth rate that a company can realize without taking into account financing or funds or external sources.  Copy the link given below and paste it in new browser window to get more information on Internal Growth Rate:- http://www.transtutors.com/homework-help/corporate-finance/financial-planning-models/pro-forma-statements/external-financing-growth/internal-growth-rate/

2. EXAMPLE OF INTERNAL GROWTH RATE

3. ASSUMPTIONS OF IGR
• Retention ratio is hypothetical to be as per the target rate
• To acquire more assets the plan should use internal
accretions parallel to retained earnings or general reserves
• The Net profit of the firm requisite and should be the
direct measurement or equivalent to sales
• The firm will not raise the external finance.

4. FORMULA OF INTERNAL GROWTH RATE

5. SUSTAINABLE GROWTH RATE (SGR)
• The sustainable growth rate (SGR) is the maximum growth
rate that a company can be maintained without the financial
leverage to increase funding or to seek outside financing.
• The SGR is a measure of how big and how fast a company can
grow without more to borrow money.
• A SGR of the company is the product of its return on
equity (ROE) and the percentage of profit that is plowed in the
company.

6. FORMULA OF SGR

7. RETENTION RATIO
• The retention ratio is the proportion of the profit in the
enterprise is retained .
• The retention ratio refers to the percentage of net
income that is retained by the company to grow, rather
than to be distributed as dividend.

8. FORMULA OF RETENTION RATIO

9. CALCULATION OF RETURN ON ASSETS
• Return on assets (ROA) is an indicator of the
profitability of a company compared to its total assets.
• ROA gives an idea how efficient management the use of
its assets to generate profits.
• Calculated by dividing an annual profit of a company by
its total assets, ROA is displayed as a percentage.

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