Use Analysis of internal Growth Rate and Sustainable Growth Rate and its Relation to Performance
Author(s)
A.D. Mahdi Atia Jubouri , M. Akdad Hussain HadiAl-Nasser ,
Download Full PDF Pages: 88-100 | Views: 167 | Downloads: 40 | DOI: 10.5281/zenodo.7393370
Abstract
The study aims to study the relationship between the rate of sustainable growth and internal growth rate and the improvement of the performance of the company and the degree of relationship between these variables. For this purpose, a sample of the listed companies was used in the Iraqi Stock Exchange for 22 companies for the period 2010-2017 through use of the financial statements of the sample companies. The research focused on the data related to the internal rate of return (EGR), sustainable rate of return (SGR) General revenue using analytical statistical methods and methods such as the Mann-Whitney U and Spearman correlation tests and using the SPSS statistical program. V22. Linear regression analysis was used to examine the correlation between the deviation of the actual growth rate from the sustainable growth rate, return on assets (ROA), price to book value (P / B), community ratios and rapid rate. The study showed that there is a correlation between ROA and IGR and SGR and is not significant with the general rate of return. The results also showed a relationship and impact between most operational efficiency indicators, IGR and SGR.
Keywords
sustainable growth, internal growth, performance
References
i. Aktas, Z., Kaya, N. Ozlale, U. (2010). Coordination between monetary policy and fiscalpolicy for an inflation targeting emerging market. Retrieved from https./' /ideas.repec.org/a/eee/jimfin/v29y2010i1p123-138.html.ancial%20Management%2010th%20Edition%20(2011).pdf
ii. Ashla, A. (2008). Sustainable growth rates: refining a measure. Strategic Change, 17(5/6), 207-214. doi:10.1002/jsc.827.
iii. Bhunia, A., & Sarkar, R. (2011). A study of financial distress based on MDA. Journal of Management Research, 3(2), 1-11. doi:10.5296/jmr.v3i2.549.
iv. Comett, M. M., Adair, T. A, & Nofsinger, J. (2012). Finance.' Application & Theory. New York, NY: McGraw-Hill.
v. Gardner, John C.; McGowan Jr., Carl B.; Moeller, Susan E. (2011). Using accounting information for financial planning and forecasting: An application of the sustainable growth model using Coca-Cola. Journal of Business Case Studies, 7(5).
vi. Gibson, C. H. (2011). Financial Reporting & Analysis: Using Financial Accounting Information. Mason, NJ: South-Western.
vii. Higgins R. C., 2008, Analysis for financial management, 9th ed. (McGraw-Hill, Inc, New York, NY).
viii. Higgins, R. C. (2011). Analysis for Financial Management 10th Edition (10th ed.). Retrieve from http://dspace.elib.ntt.edu.vn/dspace/bitstream/123456789/7693/1/Analysis%20for%20Fi
ix. Jegers, M. (2003). The sustainable growth rate of Non-profit organizations: The effect of efficiency, profitability and capital structure. Financial Accountability & Management, 19(4), 309. doi:10.1111/1468-0408.00176.
x. June, L. (2012). Prediction of corporate bankruptcy from 2008 through 2011. Journal of Accounting & Finance (2158-3625), 12(1), 31-41.
xi. Kasilingam, R. R., & Jayabal, G. G. (2012). Profitability and solvency analysis of a manufacturing company using Dupont and Altman models. BVIMR Management Edge, 5(2), 53-64.
xii. Korol, T., & Korodi, A. (2010). Predicting bankruptcy with the use of macroeconomic variables. Economic Computation & Economic Cybernetics Studies & Research, 44(1), 201-219.
xiii. Levin, Ross, Chapter 12: (2005) “Finance and Growth: Theory and Evidence,” in Handbook of Economic Growth, Vol. 1A by Philippe Aghion and Steven N Durlauf, Elsevier, 866-934.
xiv. Loughran, T., & McDonald, B. (2011). When is a liability not a liability? Textual analysis, dictionaries, and 10-Ks. Journal of Finance, 66(1), 35-65.
xv. Nasrollah Amouzesh,(2011)" Sustainable Growth Rate and Firm Performance : Evidence From Iran Stock Exchange' International Journal of Business and Social Science Vol. 2 No. 23 [Special Issue – December 2011.
xvi. Nathan Smart , (2016) ,Examining Cooperative Sustainable Growth Rates: Who Is Growing Brok, Master A THESIS B.S., Kansas State University.43-54.
xvii. Palenu, K. G. and Healy, P. M. (2008). Business analysis & valuation.` Using Financial Statements. Mason, HO: Thomson/South-Westem.
xviii. Phillips, M., Anderson, S. J., & Volker, J. (2010). Understanding small private retail firm growth using the sustainable growth model. Journal of Finance and Accountancy, 3, 1.
xix. Raisch, S, & von Krogh, G. (2007). Navigating a path to smart growth. M/T Sloan Management Review, 48(3), 65. doi: 1250414251.
xx. Raiyani, Jagadish R.(2011).Performance analysis with sustainable growth rate:A case study international Journal of Research in Commerce, Economics and Management.No,1,Issue1,pp .118-123
xxi. Ross A. Stephen, Westerfield W. Randolph, Jordan D. Bradford, (2011) FUNDAMENTALS OF corporate finance, the mcgraw-hill/irwin.
xxii. Ross A. Stephen, Westerfield W. Randolph, Jordan D. Bradford, (2013) FUNDAMENTALS OF corporate finance, the mcgraw-hill/irwin.
xxiii. Ross A. Stephen, Westerfield W. Randolph, Jordan D. Bradford, (2016) FUNDAMENTALS OF corporate finance, the mcgraw-hill/irwin
xxiv. Sehoon, K., & Sang Buhm, H. (2010). Duration analysis of corporate bankruptcy in th Presence of competing risks. Applied Economics Letters, 17(15), 1513-1516
xxv. Sormunen, N., & Laitinen, T. (2012) , Late financial, distress process stages and financial ratios : Evidence for auditors going concern evaluation . Liiketaloudellinen Aikakauuskirja (1), 41- 69 .
xxvi. Sunny Onyiri , (2014) ,Predicting Financial Distress using Altman Z- score and the sustainable growth rate, dissertation Doctor business management , northcentral university .
Cite this Article: