How We Put It Together : The database for this section covers 997 publicly held companies traded on the three major stock exchanges.

This ninth edition of The Times 100, our annual inquiry into the performance of companies headquartered in California, takes a snapshot of financial information for 1995 and then sorts and organizes it in dozens of ways.

Because fiscal years vary and results are reported quarterly, companies cannot be compared directly on their performances for calendar year 1995. But a close approximation of 1995 was created for every company, using data collected and analyzed by Market Guide Inc., a financial information services firm in Lake Success, N.Y.

Overall, the database for this section covers 997 publicly held California companies traded on the three major stock exchanges. Of those, Market Guide obtained data from Dec. 31, 1995, or later for 972 companies by the cutoff date of April 19.

Market Guide relies on its own databases and on corporate 10-Q and 10-K reports filed with the Securities and Exchange Commission, annual reports, surveys, news releases and other sources. For some charts, as indicated, the data were provided by other data companies or by government institutions.

The tables, created by The Times, were reviewed by Market Guide and Times editors and reporters. Criteria for the rankings were developed jointly by The Times and Market Guide.

Annual figures for this section may not match the latest fiscal- year numbers reported by a company. If a company’s fiscal year did not end in November or December 1995 or in January 1996, then the latest 12-month period ending in one of those months was used to calculate an annual figure.

For year-to-year comparisons, the figures for 1995 (or the four quarters ending nearest the end of the calendar year) are compared to the corresponding four quarters a year earlier.

Stock price information is based on the close of trading on April 19, 1996.

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.

Some classes of shares aren’t tracked by Market Guide and, in a few cases, this might have changed a company’s rank in some tables because stock-price information and market capitalization information might have been affected. However, an effort was made to identify and adjust for multiple classes in the published lists. For example, both Sun America and PacifiCare Health Systems would have ranked lower on the Market Value 100 chart if all share classes had not been taken into account.

Readers should note that data are sometimes reported late or aren’t filed at all. This section reflects the best available information at the deadline for publication.

There can be many reasons for late or missing data, but often the company involved is troubled or has had accounting problems. For example, accounting problems were blamed for delays in year-end financial filings for software maker Gupta Corp., based in Menlo Park, and insurance firm Exstar Financial Corp., based in Solvang.

Market Guide Inc., founded in 1983, compiles and sells comprehensive financial and descriptive infor-mation on more than 8,000 public companies trading on the New York and American stock exchanges and on Nasdaq and other market systems. Its analysts comb through thousands of quarterly and annual SEC filings, news periodicals, news feeds and other sources to maintain its database. Market Guide markets its services to institutional, professional and individual investors through more than 30 financial information vendors. Market Guide also sells its information directly to end users through Market Guide for Windows, which was used to help compile this section. Market Guide also provides its services over the Internet.

Market Guide can be reached at 2001 Marcus Ave., Lake Success, N.Y., 11042-1011. Telephone (516) 327-2400.

General Criteria

All companies in this section must be publicly traded on one of the major exchanges--New York, American or Nasdaq--and be headquartered in California.

Income is defined as income available to common stockholders from continuing operations and excludes extraordinary items and gains or losses from discontinued operations.

Sales exclude excise taxes, extraordinary income, revenue from discontinued operations and other income, such as interest (although a few companies do report interest as sales revenue). For banks and savings and loans, revenue equals interest income. (Bank revenues are often measured in other ways.) For insurance firms, revenue equals the sum of earned premiums, realized gains or losses from investments, and net investment income. For many “100” charts, companies must have had at least $10 million in 1995 sales. This restriction does not apply for the employment chart.

Section Notes

The official Times 100 ranking is explained on Page 7.

About the other charts:

Although numbers have been rounded and there may appear to be ties, rankings are based on the exact figure before rounding.

Return on equity measures the percentage profit 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 the average common shareholder’s equity. Income available to common shareholders is calculated by subtracting preferred dividends, if any, from income from continuing operations. The Return on Equity 100 table ranks companies by the average annual percentage return on common equity for the past two years.

For the Return on Equity 100 table, companies must have met these criteria: publicly traded in 1995; sales in 1995 greater than $50 million; a profit from continuing operations in 1994 and 1995; shareholder equity above $25 million; and no negative common equity for the past two fiscal years.

The Top Financial Institutions table is ranked by assets. Considered for this chart were banks, savings and loans, and thrift and loans operating in California. It includes banks registered in the state that are units of companies in other countries or states and is not restricted to holding companies with headquarters in California.

For the Lowest Priced and Highest Priced lists, a company’s market value must have exceeded $100 million.

The Divvying It Up list of dividend yields ranks companies on the basis of their dividend yields. Also listed are the current indicated annual dividends per share.

In most cases, the yield is the latest quarterly dividend multiplied by four, divided by the stock price. There is no guarantee that the same amount of cash dividend will be declared for subsequent quarters this fiscal year or that a dividend will be declared every quarter. Dividends of real estate investment trusts and master limited partnerships often include a return of capital.

The Great Expectations list of analysts’ earnings estimates was provided by First Call Corp. of Boston and is part of the Market Guide database.

The table of Top Performing Initial Public Offerings ranks companies that had their initial public common stock offerings in 1995 by the stock price appreciation between the IPO date and April 19, 1996, and was supplied by IPO Crossroads in San Francisco.