Money Tools

Sustainable Growth Rate Calculator

Estimate sustainable growth rate from return on equity and retention ratio.

Updated April 16, 2026
Free online tool
Planning and research use

Why this page exists

Growth planning gets easier when profitability and earnings retention are turned into one simple rate instead of being reviewed separately. This calculator helps visitors estimate sustainable growth rate from return on equity and retention ratio using the standard finance formula.

Interactive tool

Run the estimate

Enter your numbers and read the result first, then use the sections below to understand what affects the outcome.

Calculator

Sustainable growth rate calculator

Estimate sustainable growth rate from return on equity and retention ratio.

Result

8.68%

Estimated sustainable growth rate based on return on equity multiplied by retention ratio.

Sustainable growth rate8.68%

ROE used14.00%

Retention ratio used62.00%

Formula basisROE x retention ratio

14.00% of ROE combined with a 62.00% retention ratio points to a sustainable growth rate near 8.68% in this simple estimate.
This is often used as a quick way to frame how fast equity can compound when earnings are reinvested rather than paid out.
Use the result as a simplified planning figure only, because financing structure, share issuance, leverage changes, and operating conditions can all move real growth away from the formula result.

This is a simplified finance estimate, not investment advice. Real growth depends on financing choices, margins, reinvestment opportunities, and more than the two inputs used here.

Planning note

Last updated April 16, 2026. Use this tool to compare scenarios and plan ahead, then confirm important details with the lender, employer, insurer, contractor, or other qualified provider involved in the final decision.

How it works

What the calculator is doing

Enter return on equity and retention ratio as percentages.

The calculator multiplies ROE by retention ratio on a percentage basis.

It shows the estimated sustainable growth rate from the values entered.

Understanding your result

This is a simplified finance estimate, not investment advice. Real growth can still be affected by leverage, margins, financing choices, and business conditions.

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Examples

Ways people use this tool

Example scenarios help turn a quick estimate into a more useful comparison or planning step.

Connect profitability and reinvestment

A business with strong ROE but low retention can still have a lower sustainable growth rate than the headline profitability suggests.

Check how payout policy changes growth

A higher retention ratio generally raises the formula result if return on equity stays the same.

Create a quick planning benchmark

The formula can be a useful first-pass screen before you dig into a fuller operating model.

FAQ

Common questions

How is sustainable growth rate calculated here?

The calculator multiplies return on equity by retention ratio, using both values on a percentage basis.

Why does retention ratio matter?

Retention ratio shows how much earnings are being kept in the business, so it affects how much internally funded growth the formula can support.

Does this predict actual future growth?

No. It is a simplified estimate that can help with planning and comparison, but real growth depends on many other business factors.

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Keep comparing

Use these related tools to compare nearby scenarios, check a second estimate, or keep narrowing down the right decision.

Money ToolsUpdated April 12, 2026