What Is the Difference Between the Internal and Sustainable Growth

question 71

Essay

What is the difference between the internal and sustainable growth rates, both in definition and in calculation? In what case are the rates equal?

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Definitions:

Cash Paid

The actual outflow of cash during a period for expenses, investments, and other financial activities.

Perpetual Inventory System

An inventory tracking system where updates are made continuously as transactions occur, providing real-time inventory levels.

Gross Method

An accounting method where purchases are recorded at their gross price, without deducting any discounts at the time of purchase.

Merchandise

Products or goods that are bought, sold, or traded in the course of business.