Sustainable Corporate Growth: A Model and Management Planning Tool

This work aims to establish whether there is a rate of corporate growth that is both desirable and sustainable? The text presents analytical models and tools that enable corporate planners to evaluate their own growth needs, target realistic expectations and assess the collateral risks of growing either too fast or too slow. Focusing throughout on the concept of managed growth, the authors begin with a theoretical micro/macroeconomic analysis and proceed to a practical, applied presentation of growth theory in management decision making. They present models for both short - and long-term management, illustrated with concrete data taken from corporate annual reports and SEC 10K reports. By employing these models, planners will be able to accurately forecast optimal and feasible growth rates, evaluate the impact of price fluctuations on the sustainable growth rate, isolate the effects of productivity trends, plan working capital requirements, determine the most favourable capital structure of the firm and measure the impact of potential mergers or takeovers on sustainable growth. Each of the models can easily be programmed for computer usage. Considerable attention is paid to remedial actions that can be taken when the actual growth rate either exceeds or falls short of the sustainable growth rate, making this an especially practical tool for anyone charged with financial, sales and strategic planning responsibilities.