Organic growth is growth that comes from a company's existing businesses, as opposed to growth that comes from buying new businesses. It may be negative.
Organic growth does include growth over a period that results from investment in businesses the company owned at the beginning of the period. What it excludes is the boost to growth from acquisitions, and the decline from sales and closures of whole businesses.
When a company does not disclose organic growth numbers, it is usually possible to estimate them by estimating the numbers for acquisitions made in the period being looked at and in the previous year. It is useful to break down organic sales growth into that coming from market growth and that coming from gains in market share: this makes it easier to see how sustainable growth is.
An early reference to "organic growth" appeared in Inazo Nitobe's 1899 book The Soul of Japan.
- Canadian companies favour organic growth over M&A
- Lackluster organic growth kicks up broker M&A activity in May
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