Methodology for 100 Fastest-Growing Companies
To qualify, a company-domestic or foreign-must be trading on a major U.S. stock exchange; report data in U.S. dollars; file quarterly reports with the SEC; have a minimum market capitalization of $250 million and a stock price of at least $ 5 on June 30, 2014; and have been trading continuously since June 30, 2011. Companies must have revenue and net income for the four quarters ended on or before April 30, 2014, of at least $50 million and $10 million, respectively; and have posted an annualized growth in revenue and earnings per share of at least 20% annually over the three years ended on or before April 30, 2014.
Companies that meet these criteria are ranked by revenue growth rate; EPS growth rate; and three-year annualized total return for the period ended June 30, 2014. (To compute the revenue and EPS growth rates, Fortune uses a trailing four quarters log linear least square regression fit.)
The overall rank is based on the sum of the three ranks. Once the 100 companies are identified, they are then re-ranked within the 100, using the three equally weighted variables. If there is a tie, the company with the larger four-quarter revenue receives the higher rank.
Excluded are real estate investment trusts, limited liability companies, limited partnerships, business development companies, closed end investment firms, and companies that lost money in the quarter ended on or before April 30, 2014. In addition, Fortune excludes companies that have announced intentions to restate previously reported financial data, if these errors appear to have a significant impact. Also, Fortune excludes companies that lost money in the quarter ended May 31 or June 30, if the loss represents a deterioration in business conditions. The data are provided by Zacks Investment Research. The data checking process was aided by information provided by S&P Capital IQ, Hoover’s, Thomson Reuters, FactSet Research Systems, and Morningstar Document Research.