How large a sales increase can the company achieve without having to raise funds externally; that is, what is its self-supporting growth rate?

Peinciples of finance-what is its self-supporting growth rate?

The self-supporting growth rate is the maximum amount of sales increase a company can achieve without having to raise funds externally. 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. By assessing these metrics organizations can form an accurate picture of their capacity for internal expansion and determine how much additional resources they may require for successful growth.