Companies are increasingly focused on the top line, but do they have the financial capacity to grow? The answer is yes—and more than you might think. Our analysis of an important forward-looking metric—sustainable growth rates—across U.S. industries found that the 2004 rates for companies in the S&P 500 exceeded analysts’ average three-year revenue growth forecasts (see the exhibit “Holding Back on Growth”). This reality has powerful implications for the managements and shareholders of many of the largest U.S. firms: When a company’s sustainable growth rate exceeds its sales growth rate, the company is not fully exploiting its financial resources to generate shareholder value. In fact, our analysis suggests that there is excess liquidity in the S&P 500.