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L.A. Gear Tops Forbes’ Profitability Rankings : Earnings: The athletic footwear maker has had an average return on equity of 83.2% the past four years, the magazine says.

<i> From ASSOCIATED PRESS</i>

Athletic footwear maker L.A. Gear enjoyed the best long-term profitability of nearly 1,200 U.S. corporations surveyed by Forbes magazine, the magazine announced Sunday.

The Los Angeles-based company has averaged an 83.2% return on equity--primary earnings per share divided by common shareholders’ equity per share--in the past four years, according to Forbes’ calculations. In the last 12 months, the company’s profitability performance has slipped a bit. Its return on equity was 27.8% during that period, the magazine said.

St. Louis-based Pulitzer Publishing ranked second in profitability with an 80.6% average return on equity the past five years. Atlanta-based chemical maker Georgia Gulf was third with 78.4% the past four years.

Forbes evaluated the profitability of 1,177 companies in 20 industries for its Jan. 7, 1991, annual report issue.

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Software maker Microsoft Corp., based in Redmond, Wash., was the most profitable large corporation. Microsoft had an average return on investment of 50.4% the past five years, which landed it in 16th place on the general list.

To be considered among the largest companies, a firm had to have sales of more than $1 billion and a minimum five-year average return on equity of 22%.

The median company in Forbes’ survey had a five-year average return on investment of 14.6%, up from 14.3% in 1989. The firms’ return on investment for the latest 12 months dropped, however, from 14.4% to 12.1%.

Leading Forbes’ list of best-performing stocks was Blockbuster Entertainment. The Fort Lauderdale, Fla.-based video rental company had a five-year average stock price increase of 3,060.5%. A total of 1,078 stocks were surveyed.

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Cyprus Minerals, an Englewood, Colo.-based oil, gas and coal company, had the highest rate of earnings-per-share growth--a three-year average of 147.8%.

Forbes considers companies with annual revenue of $400 million--or $600 million for banks or electric utilities--for its annual report issue.

The only exception is biotechnology, a relatively new industry with a long lead time between research and development and actual products.

The magazine based most of its rankings on five-year averages, although there were some exceptions.

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