Sustainable growth
The rate of growth beyond which activity consumes more cash than it produces. It requires two financial years to be established, since it is a variation.
What it changes for the executive
Every additional franc of revenue leaves the company its contribution margin, but first ties up, for the length of the cash cycle, everything that had to be spent to produce it. The longer the cycle and the thinner the margin, the lower the sustainable growth threshold. That is why some rapid growth ends badly, and why an executive should know this threshold before accepting a large contract.
Example
A low-margin company with a ninety-day cycle reaches its threshold far earlier than it imagines. The contract that doubles its activity can be the one that strangles it, unless it obtains advance payments.
A term that is missing?
Describe the situation in a few lines; the reply is personal.