Every year, Top 500 reveals the elite at the forefront of the economy.
HOW THE TOP 500 ARE IDENTIFIED
The Top500 research methodology has been designed in conjunction with the University of Cape Town’s Development Policy Research Unit.
Top500 aims to identify the top five companies in each of the 100 business sectors monitored by Topco Research Department. In order to do so, some measure of the qualities that we consider being characteristic of top companies must be designed in order to rank companies. To be classed as one of South Africa’s best companies, we expect companies to excel in three key spheres, namely financial performance, empowerment, and policy and accreditation.
The criteria within financial performance speak to the ideas of top companies being large, growing and productive institutions that are leaders by virtue of their size and dynamism. Financial performance is measured by four indicators: turnover, rate of turnover growth, rand turnover growth, and turnover per employee.
Size is both an indicator and an outcome of whether or not a company is a top company. From the perspective of financial performance, turnover is used to proxy company size and this indicator has a large weight within the measure. The dynamism of top companies is reflected in their ability to expand and grow, and so we include two indicators – one relative, one absolute – of growth in the score sheet. The former indicator is the rate of turnover growth over the year, since top companies are faster-growing, while the latter is the rand value of the turnover growth.
Absolute turnover growth is included to account for the fact that top companies’ growth should make a large contribution to increased total output. These two indicators have a medium weight within the scoring system. Top companies are more productive than other companies and the final performance indicator, turnover per employee, which has a medium weight, speaks to this characteristic.