Sunday , May 19 2024

Self-financeable Growth (SFG) – How Fast A Company Can Growth

Self-financeable growth is tools how to mesure your company growth. Everyone want to know that starting a business requires cash, and after day by day a business requires even more for working capital, facilities and fixed assest, and operating expenses. But few people understand that a profitable company that tries to grow too fast can run out of cash—even if its products are great successes.

The below calculation is the best measure is Self-financeable Growth (SFG) – How Fast A Company Can Growth?

Please keep in touch in this bog for better understanding for future-

Self-financeable Growth (SFG)
Operating Cash Cycle:Lever -1 Speeding Cash FlowLever -2 Reducing CostLever -3 Raising Price
ParticularUOMBase Case
Account Receivable(DSO)Day(6)(6)(6)
Inventory ( DIO)Day898989
OCCDay838383
Account Payable ( DPO)Day999
Cost of Sales( CCC)Day747474
Operation Exp. ( Payment Days)Day383838
Income Statement:AmountPer BDTAmountPer BDTAmountPer BDT
SalesCore35.001.00035.001.00040.001.000
Cost of Sales34.000.97134.000.97134.000.971
Operating Exp.3.500.1003.200.0913.500.100
Total Cost37.501.07137.201.06337.501.071
Profit (Cash)-2.50-0.071-2.20-0.0632.500.071
Amount of cash Tied up per sales in BDTPer BDTDayTotal Per BDTPer BDTDayTotal Per BDTPer BDTDayTotal Per BDT
Cost of Sales0.9710.890.8660.9710.890.8660.9710.890.866
Operations0.1000.460.0460.0910.460.0420.1000.460.046
Cash Required for OCC0.9120.9080.912
Cash Generated per Sale in BDT( Profit)-0.071-0.0630.071
SFG Rate Caculation:
OCC SFG Rate-7.83%-6.92%7.83%
OCCs Per Year3654.3983654.3983654.398
Annual SFG Rate-34.45%-30.44%34.45%
Compounded Annual SFG Rate-30.14%-27.06%39.33%

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