Here is how we computed the ranking: The primary gauge of performance is growth in sales and earnings. BusinessWeek tallies these figures for the latest available fiscal year, but we also factor in three-year growth in order to reward those companies that keep on producing superior growth and profits over a longer term. Three-year growth rates can also provide a big boost for companies that completed large mergers or made major acquisitions during the measurement period, since the method compares companies' growth in sales and profits over the three years. South Korea's Shinhan Financial Group () (No. 7) falls into this category because it made a series of acquisitions over the last three years.
To get a read on how well management is employing assets, we factor in net margins and return on equity. And shareholder returns for one- and three-year periods tell us how investors are scoring each company's results. Then we weigh the results for sales volume to make up for the fact that it is easier for small companies to score big percentage gains than it is for large ones.
Companies that made it into the top 50 did not all have stellar years, and some that had a banner earnings year did not rank among the top 50, which simply demonstrates that the rankings depict more than a single year of performance. Indeed, the top rankings for this first year reflect the fact that over the past three years, oil, steel, and other basic materials companies boasted enormous growth and profits thanks to high demand. In future years, expect some of those high-growth technology companies lower on the list to move up.
Standard & Poor's, like BusinessWeek, is a division of The McGraw-Hill Companies.