California Has 26 of 200 on List of Top Small Firms

Even in a cool economy, computers and health care are hot industries for small businesses, Forbes magazine says in its annual ranking of the nation’s 200 best small companies.

Hawking everything from software to peripherals, computer outfits took 36 spots on the best small companies list, which the twice-monthly business glossy released Sunday in its Nov. 9 issue.

For the second year running, Forbes’ top small company was Cambex Corp., a Waltham, Mass., maker of IBM-compatible computer equipment, with a five-year return on equity of 82.1%.

Cambex earned $9.1 million on revenue of $49 million in 1991.

Koll Management Services, a real estate management company based in Newport Beach, placed second on the Forbes list.

California is home to 26 of the companies, the most of any state. Chicago led cities on the list, with 13 companies, followed by Dallas with 12, Boston with seven, and Houston and Los Angeles, with six.

Health care helped 38 companies--from drug makers to dental supply houses--land a place on the list. Four health care companies were among the top 25 firms that Forbes ranked.

Forbes evaluated more than 4,400 companies nationwide that had 12-month sales between $5 million and $350 million. The firms were ranked on 5-year average return on equity, which shows annual profit as a percent of net worth. Forbes required a five-year average annual return on equity of at least 9.5% and five-year average annual sales and earnings growth rates of at least 8%.

The magazine did not consider firms with stocks priced under $5 or issues that significantly under-performed the market during the last year.

In addition, Forbes dropped firms with more debt than equity, as well as limited partnerships, real estate investments trusts, banks and thrifts.