DETERMINANTS OF SUSTAINABLE GROWTH RATE: EVIDENCE FROM THE CONSUMER NON-CYCLICAL SECTOR

Abstract

This study aims to examine the influence of Sales Growth (SG), Net Profit Margin (NPM), Financial 
Leverage (FL), and Total Asset Turnover (ATO) on Sustainable Growth Rate (SGR) in consumer non
cyclical companies listed on the Indonesia Stock Exchange (BEI) during the 2021–2024 period. SGR is measured using the Higgins (1977) DuPont decomposition framework, which identifies profitability, asset efficiency, leverage, and retention policy as the primary determinants of a firm's internally financed growth ceiling. This study employs a causal quantitative approach with purposive sampling, resulting in a final sample of 38 companies and 152 firm-year observations. Secondary data were obtained from audited annual financial reports published on the BEI official website and analyzed using panel data regression with EViews. The Fixed Effects Model was selected based on the Chow test and Hausman test results. The findings indicate that Net Profit Margin, Financial Leverage, and Total Asset Turnover each exert a positive and significant effect on Sustainable Growth Rate, with Net Profit Margin emerging as the dominant determinant (coefficient = 0.687). Sales Growth, by contrast, does not exert a significant effect on SGR, suggesting that realized revenue expansion does not automatically translate into improvements in internally sustainable growth capacity under post
pandemic macroeconomic conditions. These results contribute sector-specific empirical evidence on SGR determinants in the Indonesian consumer non-cyclical sector and provide practical guidance for corporate managers and investors in evaluating financial growth quality beyond revenue metrics.