To qualify for this year's listing, a company must be incorporated in the U.S.; have a minimum market capitalization of $250 million; have a stock price of at least $5; have been trading continuously since June 30, 2004; have revenue and net income for the four quarters ended on or before May 31, 2007, of at least $50 million and $10 million, respectively; and have posted a compound annual growth in revenue and earnings per share of at least 25% annually over the three years ended on or before May 31, 2007.
All companies that meet these criteria are ranked by their revenue growth rate; their EPS growth rate; and their three-year annualized total return to investors for the period ended June 30, 2007. The overall rank is based on the sum of the three ranks. If there is a tie, the company with the larger four-quarter revenue receives the higher rank.
To compute the revenue and EPS growth rates, FORTUNE uses a trailing four quarters log linear least square regression fit. This method provides a better measure of average or normalized growth than a simple point-to-point calculation.
Excluded from the listing are foreign companies, real estate investment trusts, and limited partnerships. Also excluded are companies that lost money in the quarter or four quarters ended on or before May 31 or in the quarter ended June 30. In addition, FORTUNE excludes companies that have announced plans to restate previously reported financial data, if the restatement seems likely to have a significant impact.
If you have further questions about the 100 Fastest-Growing Companies, please e-mail lists@cnnmoney.com.