Forum Archive Index - May 2000

["Ron Drever" <ron.drever@telecom.co.nz>]

Tony,

 

Organic growth in the context of business has nothing to do with the environment. It is simply a term for output reinvested as input.

 

In the context of the Warehouse's future financial outlook it means profits will be used to provide capital for future activities.

 

There are essentially two main types of growth, organic and acquisitive.

 

Acquisitive growth (or growth by acquisition) is where profits are used to purchase other companies (acquisitions) to grow the balance sheet.

 

Some investors view companies that pay out a high percentage of earnings as dividends as having poor growth prospects.  

 

Cheers,

Ron.