Internal Growth Rate Calculator

About this calculator

The internal growth rate is the maximum rate a company can grow its sales and assets using only retained earnings — profit kept in the business rather than paid out as dividends — without taking on any new debt or issuing new equity. It's calculated as IGR = (ROA × retention ratio) / (1 − ROA × retention ratio), where ROA is return on assets (net income ÷ total assets) and the retention ratio is the share of net income not paid out as dividends.

This metric is distinct from the related sustainable growth rate, which allows for growth financed by debt in proportion to the firm's existing capital structure — internal growth rate is the more conservative, “no external financing at all” benchmark.

Corporate finance analysts, small business owners planning organic expansion, and finance students studying capital structure use it to gauge how fast a company can realistically grow before it's forced to borrow or raise outside capital, entering net income, total assets, and the payout ratio to get the internal growth rate directly.