Crunching the Numbers

To glean an understanding of how the companies in the Standard & Poor's Europe 350 stock index stack up, take a look at the accompanying tables. These 350 stocks represent about 70% of the market value of all European equities and are chosen for the index according to market capitalization and other factors. Here's how we computed our rankings of these top European companies:

The primary gauge of performance is sales and earnings growth. We tally them for the latest available 12-month period but also factor in three-year growth to reward those who keep producing superior growth and profits over a longer term. Three-year growth rates can also provide a significant boost to 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-year period. No.1 HBOS PLC, for example, benefited from being the product of a recent merger between two big, successful financial institutions. Other companies' positions in the rankings were affected by the same factor.

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 recognize that it is easier for small companies to score big percentage gains in this area than it is for large ones.

Each company in the S&P Europe 350 was evaluated according to the latest data available. Seven, however, remained unranked because of incomplete data. Those that made it into the top 50 did not all have a stellar year in all categories. But they demonstrate that even in a time of skittish stock markets and economic malaise, it is possible to deliver solid results.

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