Sustainable growth rate
Sustainable growth rate means how much a plant, animal, or business can grow without hurting the environment, running out of resources, or going bankrupt.
For example, imagine you have a toy farm with a patch of land that can grow carrots. You want to grow as many carrots as possible, but you need to make sure the soil has enough nutrients and water to keep growing more and more carrots. If you add too many carrots or don't take care of the soil, the carrots won't grow as well, the soil will be depleted, and you won't have any more carrots to sell or eat later.
In the same way, businesses need to make sure they have enough resources, like money and people, to keep growing without overspending, overusing resources, or losing customers. Businesses need to think long-term and plan for the future, especially if they want to grow sustainably and not just make a quick profit.
Sustainable growth rate depends on many factors like a business's industry, competition, market demand, and resources. By analyzing these factors, businesses can figure out how much they can grow without harming the environment, wasting resources, going out of business, or losing their customers' trust. This way, they can grow steadily and sustainably, just like a plant or animal in nature.
For example, imagine you have a toy farm with a patch of land that can grow carrots. You want to grow as many carrots as possible, but you need to make sure the soil has enough nutrients and water to keep growing more and more carrots. If you add too many carrots or don't take care of the soil, the carrots won't grow as well, the soil will be depleted, and you won't have any more carrots to sell or eat later.
In the same way, businesses need to make sure they have enough resources, like money and people, to keep growing without overspending, overusing resources, or losing customers. Businesses need to think long-term and plan for the future, especially if they want to grow sustainably and not just make a quick profit.
Sustainable growth rate depends on many factors like a business's industry, competition, market demand, and resources. By analyzing these factors, businesses can figure out how much they can grow without harming the environment, wasting resources, going out of business, or losing their customers' trust. This way, they can grow steadily and sustainably, just like a plant or animal in nature.