Rytvae Consulting · Think Right · Invest Right
Sustainable Growth Rate Calculator
Result
Chart
Show formula & working
Sustainable growth = ROE × Retention ratio, where ROE = PAT ÷ Opening equity and retention = (PAT − Dividends) ÷ PAT
Details
How this works
If a business keeps its margins, asset turnover and debt-equity ratio constant, it can grow only as fast as retained profits add to equity.
Growing faster needs fresh equity, more borrowing or better efficiency — useful when planning expansion and borrowing.
Frequently asked questions
Why opening equity?
Retained profits during the year add to equity at year-end; ROE on opening equity gives the growth that retention can fund.
What if growth plans exceed it?
Funding the gap with debt raises leverage — test the effect with the debt-equity and DSCR calculators.
Want your ratios read the way a lender reads them?
Classification, quasi-equity and one-off items all move the ratios. Talk to Rytvae before you approach lenders.