Enter the retention plowback ratio and return on assets of a company into the calculator to determine the internal growth rate.
Internal Growth Rate Formula
The following formula can be used to calculate an internal growth rate of a business.
IGR = ROA * b / (1- ROA * b)
- Where IGR is the internal growth rate
- ROA is the return on assets
- b is the plowback ratio
FAQ
What is an internal growth rate?
An internal growth rate is a business metric used to understand how a companies internal revenue is growing.
What is a plowback ratio?
A plowback ratio is a ratio that measures amount of earnings that are retained by a company after it has paid out dividends to shareholders.
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