Key Management Ratios: The Clearest Guide to the Critical Numbers That Drive Your Business, Fourth Edition

Chapter 14. Growth

Growth • Analysis • Growth equilibrium • Application to acquisitions

	Commerce defies every wind, outrides every tempest and invades every zone.
	--GEORGE BANCROFT (1800–1891)

Figure 14.1. Growth and the need for balance

Growth

Growth to a company is like medicine is to a patient – beneficial up to a certain level, but dangerous and possibly fatal when that level is exceeded. There is a need for balance between profits, assets and growth (see figure 14.1). Any imbalance between these factors will impact strongly on cash flow. Given ...