Organic Growth

AAA

DEFINITION of 'Organic Growth'

The growth rate that a company can achieve by increasing output and enhancing sales. This excludes any profits or growth acquired from takeovers, acquisitions or mergers. Takeovers, acquisitions and mergers do not bring about profits generated within the company, and are therefore not considered organic.

INVESTOPEDIA EXPLAINS 'Organic Growth'

Organic growth represents the true growth for the core of the company. It is a good indicator of how well management has used its internal resources to expand profits. Organic growth also identifies whether managers have used their skills to improve the business.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Erosion

    The gradual redirection of funds from profitable segments or ...
  3. Critical Mass

    A very important or crucial stage in a company's development, ...
  4. Growth Rates

    The amount of increase that a specific variable has gained within ...
  5. Merger

    The combining of two or more companies, generally by offering ...
  6. Mergers And Acquisitions - M&A

    A general term used to refer to the consolidation of companies. ...
Related Articles
  1. Great Expectations: Forecasting Sales ...
    Fundamental Analysis

    Great Expectations: Forecasting Sales ...

  2. Is Growth Always A Good Thing?
    Markets

    Is Growth Always A Good Thing?

  3. How To Use The P/E Ratio And PEG To ...
    Forex Education

    How To Use The P/E Ratio And PEG To ...

  4. PEG Ratio Nails Down Value Stocks
    Markets

    PEG Ratio Nails Down Value Stocks

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center