Internal Growth Rate (IGR)

The Internal Growth Rate (IGR) is the maximum rate at which a company can grow its revenue using only its retained earnings, without raising any external financing (neither debt nor equity).

The formula is as follows:

\[\text{Retention Ratio} = 1 - \text{Dividend Payout Ratio}\] \[\text{IGR} = (\text{Return on Assets} \cdot \text{Retention Ratio}) / (1 - (\text{Return on Assets} \cdot \text{Retention Ratio}))\]

Also known as: IGR.

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Calculate the Internal Growth Rate (IGR) in Python

The Internal Growth Rate (IGR) is available in the Models module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_internal_growth_rate as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "MSFT"], api_key="FINANCIAL_MODELING_PREP_KEY")

toolkit.models.get_internal_growth_rate()

Which returns:

	2021	2022	2023
AAPL	0.3118	0.3183	0.3028
MSFT	0.164	0.1853	0.1565

Parameters

get_internal_growth_rate accepts the following parameters:

rounding (int, optional): The number of decimals to round the results to. Defaults to None.
growth (bool, optional): Whether to calculate the growth of the values. Defaults to False.
lag (int | list[int], optional): The lag to use for the growth calculation. Defaults to 1.
standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
trailing (int | None, optional): The trailing period to use for the calculation. Defaults to None.

The Models module page introduces the module, and the sidebar lists all of its functions.

Calculate the Internal Growth Rate (IGR) in Python

Parameters

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