If you throw all the products we buy and the services we use in one basket, then add up the price tag, that's the Gross Domestic Product, which is the primary metric economists use to assess the economic health of a country or region.

The easy part of calculating GDP is the calculation itself: C+I+G+(X-M)=GDP. Got it? No? Well, add Consumption, Investment by companies, Government purchases, and then take the product of eXports (calling it 'E' would lack sexiness) minus iMports ('I' was taken). Viola! GDP.

Still don't get it? Well, knowing the components helps. Consumption is the biggest component, and it's a tally of the cost of all the goods and services we buy. Investment is what companies spend on the real assets they own, plus the value of the inventory that we haven't gobbled up through consumption. Government purchases are what the Feds pay money for (whether it be highways or fighter jets, though big social programs, like welfare, aren't counted). And then we calculate the difference between the goods and services we¿re sending to other countries and the stuff we're bringing in.

Good. That explains it, except there's a catch. Inflation has a habit of distorting the numbers, so economists talk about either Nominal GDP or Real GDP. In fact, Real GDP isn't necessarily "real" for most folks, since it takes any inflation out. Nominal GDP includes the effects of inflation. (There's something called the implicit price deflator which is a calculation using the two, but we'll spare you the details.)

So, now that we know GDP, why do we want to? Well, it's good to compare different markets. And watching the trend shows whether a given economy is growing (good), stagnating (not so good), or shrinking (very not so good). When GDP goes down two quarters in a row, we're officially in a recession.

For the record, GDP is released at the end of each month, with most reporting ¿preliminary¿ data for the previous month. But you won't get final GDP numbers for the fourth quarter of a year until the very end of the first quarter of the next year. After all, it's not an easy number to calculate.

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Thursday, May 29, 2008

Hansen Natural Tops BusinessWeek's Annual List of 'Hot Growth Companies'

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NEW YORK, May 29, 2008 /PRNewswire via COMTEX/ ----Hansen Natural, maker of the popular Monster Energy drink, tops BusinessWeek's annual "Hot Growth Companies" ranking of America's 50 fastest-growing small companies. The businesses making the cut this year are the trend-spotters and innovators, the companies that have displayed an ability to thrive against multinationals with more market clout and foreign rivals with cheaper cost structures. Above all, these companies are showing resilience in the face of a worsening economy.

Collectively, this year's Hot Growth companies saw profits rise 26% in their most recent quarters, versus an average 27% drop in fourth-quarter profits for the broader Standard & Poor's 500-stock index. As a group, they enjoyed average sales growth of 41.7% over the past three years and a 158% surge in profits in the past 12 months. This compares to an average sales growth of just 11.6% for the S&P 500 over the past three years, and a 20.6% increase in earnings last year.

BusinessWeek has made two significant changes to this year's Hot Growth ranking. Each company's performance is now compared with the performance of larger companies in its industry. That reduces the impact of sector-specific shocks, such as high oil prices. In addition, a tighter screening process is now used, so only 50 companies are ranked, as opposed to 100 in years past.

To rank the companies, BusinessWeek started with Standard & Poor's Compustat database of 10,000 publicly traded corporations. Multiple screening processes to identify the companies eligible for the Hot Growth ranking. The remaining companies were then ranked by a combination of return on invested capital (ROIC) and three-year sales growth, each metric adjusted for the performance of the corresponding S&P 500 sector. Finally, since numbers don't always tell the whole story, BusinessWeek used its editorial judgment, excluding or adjusting the rank of companies with extended stock price declines or other red flags that raise questions about future performance.

The annual "Hot Growth Companies" ranking appears in BusinessWeek's June 9, 2008 issue, with expanded content, including full methodology, on BusinessWeek.com at www.businessweek.com.

 The Top 50 "Hot Growth
   Companies" 1 HANSEN NATURAL HANS 2 LULULEMON ATHLETICA LULU 3 GRAHAM GHM 4 NORTH AMERICAN GALVANIZING & COATINGS NGA 5
   BOLT TECHNOLOGY BOLT 6 VSE VSEC 7 STRAYER EDUCATION STRA 8 CARACO PHARM. LABS. CPD 9 XENOPORT XNPT 10 GYMBOREE GYMB 11 ASTRONICS
   ATRO 12 AMERICAN ECOLOGY ECOL 13 BLUE NILE NILE 14 VASCO DATA SECURITY INTERNATIONAL VDSI 15 QUICKSILVER RESOURCES KWK 16
   NUTRISYSTEMS NTRI 17 AMBASSADORS GROUP EPAX 18 SOTHEBY'S BID 19 BIDZ.COM BIDZ 20 PREMIER EXHIBITIONS PRXI 21 PETMED EXPRESS
   PETS 22 L.B. FOSTER FSTR 23 ULTIMATE SOFTWARE GROUP ULTI 24 PRICELINE.COM PCLN 25 J.CREW GROUP JCG 26 DECKERS OUTDOOR DECK
   27 CAL-MAINE GROUP CALM 28 HAYNES INTERNATIONAL HAYN 29 SUN HYDRAULICS SNHY 30 HURCO HURC 31 ITT EDUCATIONAL SVCS. ESI 32
   APPLIANCE RECYCLING CENTERS OF AMERICA ARCI 33 INTERACTIVE INTELLIGENCE ININ 34 UNDER ARMOUR UA 35 MORNINGSTAR MORN 36 ICF
   INTERNATIONAL ICFI 37 HITTITE MICROWAVE HITT 38 LSB INDUSTRIES LXU 39 SIGMA DESIGNS SIGM 40 AMERIGON ARGN 41 INTUITIVE SURGICAL
   ISRG 42 AZZ AZZ 43 ADAMS GOLF ADGF 44 RTI INTERNATIONAL METALS RTI 45 MIDDLEBY MIDD 46 NETFLIX NFLX 47 VARIAN SEMICONDUCTOR
   EQUIPMENT VSEA 48 DAWSON GEOPHYSICAL DWSN 49 IDEXX LABORATORIES IDXX 50 GENCOR INDUSTRIES GENC

SOURCE BusinessWeek

http://www.businessweek.com

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