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The Times 100 : The Best Performing Companies in California : WHO, WHAT & WHERE : Digging for Data: How It All Came Together : Researchers pored over information on 830 California companies to uncover those that met criteria set by The Times and MZ Group.

May 01, 1990

This third annual edition of The Times 100 is designed to provide a systematic look into the dynamics of California business by ranking the performance of companies headquartered in the state.

The information was collected and analyzed by MZ Group, a business analysis and database publishing firm in San Francisco (415-543-8290) headed by Mansoor Zakaria and Kevin Colosimo. MZ's research was coordinated by Helen Arrick.

MZ Group gathered information on 830 California-based companies whose stock is publicly traded, relying on databases, corporate and government reports, a mail survey and direct telephone contact with company representatives. Certain historical and other selected data were provided by Standard & Poor's Compustat, Warner Computer Systems and IDD Information Services.

The tables generated by MZ were reviewed closely by Times editors and reporters. Criteria for the rankings were developed by The Times and MZ Group.

MZ Group used financial data as reported at a company's fiscal year-end for years 1987, 1988 and, if available, 1989. If 1989 fiscal year-end data had not been reported to the Securities and Exchange Commission, the most recently reported four quarters were used. (The Exceptions table on Page 46 lists companies for which this applies).

If a company's fiscal year ends between January and May, its financial results are reported for the previous calendar year. For example, the financial data for a company completing its fiscal year in February, 1990, will be reported as 1989 results.

Financial data from 1988 and 1987 has not been restated for acquisitions and/or discontinued operations. This allows the reader to see actual historical growth for the company, whether from internal growth or through acquisitions.

A few companies have majority-owned subsidiaries that are traded as separate entities. The financial results for these subsidiaries are presented independently as well as on a consolidated basis in the accounts of the parent companies. This applies to: Caesars World (parent) and Caesars New Jersey; Unocal (managing general partner) and Union Exploration Partners; ICN Pharmaceuticals (parent) and SPI Pharmaceuticals; ICN Biomedical (parent) and Viratek.

Two California-based companies included in this supplement are majority owned by firms outside California but are traded as separate entities. Union Bank is 80% owned by Bank of Tokyo, and National Health Laboratories is 95% owned by Revlon Group.

General Criteria

All companies must be publicly traded on the New York or American stock exchange or the NASDAQ system or over the counter and have their headquarters in California.

Income is defined as after-tax income from continuing operations and excludes extraordinary items and gains or losses from discontinued operations.

Sales excludes excise taxes, extraordinary income, revenue from discontinued operations and other income, such as interest. For banks and savings and loan associations, revenue equals the sum of interest and non-interest income. For insurance firms, revenue equals the sum of earned premiums, realized gains or losses from investments and net investment income. For all charts except the stock market performance charts, companies must have had at least $50 million in 1989 sales.

Section Notes

The Bottom Line--Return on equity measures the profit that a company earns for every dollar common stockholders have invested in the firm. Return on equity is defined as income available to common shareholders divided by average common shareholder equity. Income available to common shareholders is calculated by subtracting preferred dividends (if any) from income from continuing operations. The Times 100 table ranks companies by the average return on common equity for the past two years.

For The Times 100 table, companies must have met the following criteria: publicly traded since December, 1987; sales in 1989 greater than $50 million; a profit from continuing operations in 1989 and 1988; no negative common equity for each of the past three fiscal years and not more than twice as much long-term debt as total shareholder equity.

Companies in the Top 25 and Bottom 25 in Absolute Profits must have been publicly traded in 1989. Just as the Top 25 in Absolute Profits ranks companies by dollar amount of profits from continuing operations, the Bottom 25 ranks companies by dollar amount of loss.

The Top 25 Banks and S&Ls table shows return on assets, which measures the percentage profit for every dollar in assets. Companies must have been publicly traded in 1989, with total assets exceeding $1 billion.

The Top 25 in Profit Margins provides the percentage profit for every dollar in sales. Companies must have been publicly traded in 1989, with total sales exceeding $50 million.

The Born Again table shows companies that have had the greatest turnaround from a loss in 1988 to a profit in 1989. The Nose Dives table lists firms that have suffered the greatest setback from a profit in 1988 to a loss in 1989.

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