Enter the retention plow back 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

## Internal Growth Rate Definition

An internal growth rate is a measure of the change in internal revenue over time with respect to the assets of a company.

## Internal Growth Rate Example

How to calculate internal growth rate?

1. First, determine the return on assets.

Calculate the total return on assets over a period of time.

2. Next, determine the plowback ratio.

Calculate the plowback ratio.

3. Finally, calculate the internal growth rate.

Calculate the internal growth rate using the formula above.

## FAQ

What is an internal growth rate?

An internal growth rate is a business metric used to understand how a company’s internal revenue is growing.

What is a plowback ratio?

A plow back ratio is a ratio that measures the amount of earnings that are retained by a company after it has paid out dividends to shareholders.