How IW Selected the Winners

Dec. 21, 2004

The candidate companies were drawn from the IndustryWeek 1000, a list of the world's largest publicly held manufacturing companies based on revenues. The IW 1000 was published in IndustryWeek's June 12 issue. Waltham, Mass.-based Primark Corp. supplied the data for the IW 1000. First, the companies chosen as winners in 1999 were considered finalists. Second, using a proprietary financial formula, we selected 100 additional finalists from the IW 1000. We looked at each company's performance in the following areas: profit-margin growth, sales-turnover growth, revenue growth, inventory turnover growth, profit growth, profit margin, leverage, sales turnover, return on assets, and return on equity. In our judging we also considered measures such as total revenues, earnings per share, net income, foreign sales as a percentage of total sales, and research and development expenditures as a percentage of total sales. Four years of data supplied by Primark were analyzed. IW also asked 95 international expert panelists, including business leaders, analysts, and academicians, to vote for those companies among the 200 finalists that they believe to be among the best-managed in the world. All IW editors also were asked to complete the ballot. Because panelists and editors had the opportunity to nominate companies in the IW 1000 that did not appear on the ballot, the total number of finalists surpassed 200. Each IW 1000 company was asked to complete a questionnaire detailing its strongest performance and best practices in the following areas: people, market development, technology, processes, and social responsibility. IW reviewed the finalists' questionnaires and also consulted its own research on each finalist's management practices. Using all of the collected data -- financial formula results, questionnaires, company information, and expert panelist and editor votes and comments -- IW editors carefully selected the 100 winning companies. Selections were final as of Aug. 1. Research was conducted by interns Beth Barovian, Lisa Hofmann, Carrie Mack, Judi Patrizi, Marie Spencer, and IW staff.

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