Forbes Award - Best Under A Billion 200 Companies For 2002

The easy way would be to let the computer rank all the companies and simply put the top 200 on the list. As in the college admissions process, while quantitative data is a handy filter, it doesn't tell the whole story. In the end, the selection process is much more art than science.

Approcimately half of the members of our list made the grade based on the numbers alone. Switzerland's Logitech, a maker of computer peripherals, posted three-year annualized earnings growth of 110% and sports areturn on equity of 25% . In Germany, both Tecis and MLP, which provide financial advice, have seen revenue growth in the past three years.

But sometimes the numbers don't look so hot. For the rest of the list, we drew upon the expertise and insight of our network of sources: fund managers, analysts and entrepreneurs. Take Roly, a turnaround story in Singapore. Founded in 1995 by the Taiwanese brothers Robert and Lu-Yen Wang, Roly overexpanded in the late 1990s and was hit hard by the Asian financial crisis. The company has since streamlined operations, and in its latest reporting period, Roly's net profit grew 369%, to $4.7 million. Roly, which sells branded children's apparel and toys, expects to capitalize on China's entry into the WTO.

Other can fall under the radar by having short histories as public companies. SPARX Asset Management in Fapan has been publicly quoted for less than a year, but its stock price has already mor than doubled, even as the Fapanese market remains in the doldrums. SPARX has also seen its assets under management grow fivefold in the past few years.

We also include innovative companies that may have stumbled recently but have a unusual competitive strategy. Ryohin Keikaku is a good example. A Japanese retailer, its sales have grown from $500 million in 1997 to just under $1 billion today by selling cheap, functional and well-designed products to Japanese consumers. Its international expansion hasn't gone as smoothly, but it's a company we believe is going to be around for the long haul.

On this year's list 31 countries are represented. Some, such as the U.K., France, and Japan, have well-developed markets for small-cap companies. Latin America and most of Africa are absent because of tough economic times and historically underdeveloped small-company exchanges. Others, such as Indonesia, South Korea, and Denmark, have fewer small public companise but are home to some great entrepreneurial stories.