Research on 105 Efficient Growth Firms Shows Financial Strategies for Strong Total Shareholder Return
A Gartner analysis of more than 1,500 companies across the S&P 500, S&P 400, and S&P 600 has identified 105 “efficient growth” firms that achieved 51% total shareholder return (TSR) premium from 2014 to 2024 by employing these four interconnected financial strategies. Gartner defines this efficient growth as the ability to simultaneously achieve above-industry revenue growth, margin expansion, and capital efficiency.
“Volatility and economic shifts make profitable growth increasingly elusive for most CFOs,” said Randeep Rathindran, Distinguished Vice President in the Gartner Finance practice. “To succeed, CFOs should try to emulate efficient growth companies by linking liquidity management, structural cost of goods sold (COGS), and sales, general and administrative (SG&A), and disciplined debt use into a self-reinforcing growth strategy.”
1) Paying Suppliers Sooner to Boost the Bottom Line
For example, a semiconductor firm agreed to shorter payment terms and paid premiums and deposits to secure semiconductor capacity for future growth, ensuring continuity in a market where supply constraints could derail revenue plans.
