How much growth can finance sustain itself?
Self-supporting Growth Rate is the highest amount of growth a business can have without raising external funds. This rate depends on the company’s current financial position and its ability to generate sufficient cash flow from operations to fund additional growth. A number of factors need to be taken into consideration when calculating a company’s self-supporting growth rate, including the profitability of existing products and services, working capital amount, availability of lines of credit, cost structure and competitive advantages. Assessing these metrics allows organizations to get a clear picture of the capacity they have for growth and can determine what additional resources are needed for success.
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