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Q. How are companies ranked?
A. We look at the growth in company net sales between 1998 and 2002. We calculate the percentage growth and rank companies on that number alone.
Q. What are the basic criteria for eligibility?
A. To be eligible for the 2003 Inc 500 list, your company must meet five basic criteria: Your company is independent and privately held (not a subsidiary or a division). Your company had sales of at least $200,000 in 1998. Your company has a five-year sales history that includes an increase in 2002 sales over 2001 sales. Your company is not a holding company, regulated bank, or utility. And your company is based in the United States.
Q. What is acceptable supporting documentation for my application?
A. You should submit copies of the first three pages of your signed tax forms for each year (2002, 2001, 1998). We need the page with your sales and the page that shows the method of accounting you have used. Documentation for 2001 and 2002 should reflect the same method of accounting. If you don't have tax returns that reflect the net sales you want to submit, then you may supply us with financial statements. These may be audited or reviewed, but they must have been prepared by an independent accountant. We do not accept compilations. We will need the name and phone number of the accountant(s), as well.
Q. What if my company was founded during or after 1998?
A. If your company did not generate net sales in fiscal year 1998 (which can run, for our purposes, as late as March 31, 1999), then your company is NOT eligible for the 2003 Inc 500. However, if you think you may be eligible for the list in future years, please fill out the top part of the application (name, address, etc.), put an asterisk next to the "year founded," and write "keep on mailing list."
Q. What if my company is public?
A. Public companies are NOT eligible for the Inc 500. In the past, our magazine has compiled a similar annual list of the fastest-growing publicly traded companies, called the Inc 100. However, we have suspended that list and are no longer putting together a ranking dedicated to public companies.
Q. What if my company used to be independent and was acquired or went public?
A. You are not eligible for the Inc 500 unless your company was acquired or went public after your 2002 calendar or fiscal year end.
Q. What if my company used to be a subsidiary or a division and is now independent?
A. You are still eligible for the Inc 500. Be careful, though, when submitting supporting documentation of your net sales numbers from the years in which the company was a subsidiary or a division. Make sure the figures reflect only the net sales of your subsidiary or division, and not of the entire company. Documentation for subsidiary sales must be from an independent accountant. An internal financial statement is NOT sufficient.
Q. What if my 1998 sales are below $200,000?
A. Then your company is NOT eligible for the Inc 500. We adhere strictly to this minimum. (Even $199,999 is not acceptable.) If your 1998 net sales are close to $200,000, you may want to figure out what your net sales were using both cash and accrual methods of accounting. Sometimes using a different method of computing net sales will make a difference and put your 1998 net sales over the minimum.
Q. What if my company was a partnership in 1998 and is now a corporation?
A. That's fine. Your company can be structured however you want, as long as it is currently independent and meets the other criteria.
Q. How is the growth percentage calculated?
A. Divide 2002 sales by 1998 sales, subtract 1, and multiply by 100.
[(2002 sales/1998 sales) - 1] x 100
Q. Will my growth percentage be high enough to make the 2003 Inc 500?
A. Although the bottom of the list changes every year due to the number of companies that apply and the kind of growth they've experienced, we encourage companies with a five-year growth of more than 350% to apply. In 2002, the #500 company had a growth percentage of 440.
When calculating your percentage growth, make sure you are calculating the growth percentage properly and using your net sales numbers (not net income).
Q. Does my company have to be profitable to be eligible?
A. No. The Inc 500 is determined solely by net sales growth, and profitability does not enter into the equation. Even nonprofits are eligible to apply.
Q. If my fiscal year doesn't end in December, what sales numbers should I fill in for each year?
A. Regardless of when you calculate your fiscal year to begin and end, you must submit your net sales numbers within certain parameters so that we can compare companies fairly. Please use the following to determine what net sales numbers you should fill in for each fiscal year.
- Fiscal year 1998 must end between April 1, 1998 and March 31, 1999
- Fiscal year 2001 must end between April 1, 2001 and March 31, 2002
- Fiscal year 2002 must end between April 1, 2002 and March 31, 2003
We cannot make exceptions to this rule.
Q. What if my company has different fiscal year ends for each year?
A. It is OK is your company has different fiscal year ends for different years. Each fiscal year, however, must reflect a full 12-month period, except the base year of 1998. If your company switched its fiscal year end during one of the years we look at, then it is important for you to submit documentation that covers an entire 12-month period. For instance, if you have a tax return that only shows 6 months of net sales, you must supplement it with a letter from your outside accounting firm that supplies us with a number for the other 6 months involved, thereby covering the entire 12 months. This must be an exact figure; it cannot be an average or estimate.
Q. What if my company's name has changed?
A. Please fill out the application with your new name and include a brief note explaining that your company used to go by a different name.
For more about how the list is compiled or to order reprints of this year's list, please see our further details page.
Thanks for your interest in the Inc 500.
This document was last updated October 31, 2002
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