---

Online calculator to estimate the growth in a company’s earnings by using simple sustainable growth formula.

What is Sustainable growth?

Sustainable growth is the rate of growth that is most realistic estimate of the growth in a company’s earnings, assuming that the company does not alter its capital structure. The most common method of estimation is to estimate sustainable growth as the product of the return on equity and earnings retention: Sustainable growth = return on equity x retention rate.

If a company changes its capital structure, this affects its sustainable growth: increasing its financial leverage increases its sustainable growth, ceteris paribus, and decreasing its financial leverage, ceteris paribus, lowers its sustainable growth.