what is an internal growth rate igr 
an internal growth rate igr is the highest level of growth achievable for a business without obtaining outside financing and a firm s maximum internal growth rate is the level of business operations that can continue to fund and grow the company formula and calculating igrto calculate the internal growth rate for a company you have to determine two variables first you need the company s return on assets roa which is net income total assets or average of total assets across periods begin aligned text net income div text total assets or average of total assets across periods end aligned net income total assets or average of total assets across periods then you need its retention ratio rr which is the percentage of how much net income is kept by the company finally you can calculate the igr so imagine company a had the following data in its financial statements using the formula for roa 30 843 000 114 938 000 you get 0 27 the retention ratio 1 358 000 30 834 000 results in 0 04 then you multiply the roa and rr to get your igr 