Internal Growth Rate

Internal growth rate, abbreviated as IGR, is the highest rate of growth a company is able to achieve without using any external funds.

 

Internal Growth Rate Formula

\(\large{ IGR =  \frac{ RR }{ ROA }   }\)

Symbol

\(\large{ IGR }\) = internal growth rate

\(\large{ RR }\) = retention ratio

\(\large{ ROA }\) = return on asset