If there's one word that sums up the public companies based in Georgia — the ones that appear on the Georgia 100 — it's "diverse."

Like the Georgia economy, which is wedded to no dominant industry group but is host to many, the universe of public corporations in this state ranges from more than $122 billion in market value at the top to $20 million at the bottom. The revenue spread for 2006 ranges from $90.84 billion to less than $10 million.

The problem for The Atlanta Journal-Constitution's annual Georgia 100 is how to compare these companies with each other, given this range in financial measurements. If we just looked at companies by their annual revenue, it would be easy.

But the purpose — the objective — of the Georgia 100 is to look at how these companies performed individually, as businesses. "Performance" is defined as what a company's management did with the resources it had in the economic and market environment of 2006.

The granddaddy of company rankings is the Fortune 500, now 52 years old. That magazine ranks companies on its 500 and 1000 lists according to revenue, which is not a bad idea considering that all the companies in its universe are big.

The smallest company on this year's Fortune 500 is Sungard Data Systems of Wayne, Pa., with revenue of $4.32 billion. Only 14 members of the Georgia 100 had revenue of that amount or better in 2006. (The biggest on Fortune's list, incidentally, is Wal-Mart Stores with $351.14 billion in revenue.)

Another way to rank companies is by percentage changes from year to year in some variable such as profits or sales. While that seems fair, it gives small companies an unfair advantage, since they can post big percentage changes on comparatively small numerical changes.

The Atlanta Journal-Constitution's decision to rank companies by their performance attempts to get around these problems by mixing absolute and percentage variables.

The process begins with a list of about 140 publicly traded companies that meet certain minimum standards, such as market value, frequency of trading and price history. And they must be headquartered in Georgia.

Companies that fail to file relevant financial documents with the Securities and Exchange Commission by the deadline set by the publication timetable are also omitted, along with companies whose auditors issue a "going concern" opinion. Some companies file late because of regulatory investigations or other legal matters that make on-time reporting impossible.

For the remaining universe of companies, accountants in the Atlanta office of PricewaterhouseCoopers LLP, an international accounting and business consulting firm, retrieve relevant financial data from the firms' annual 10-K reports filed with the SEC.

The analysts applied five weighted variables to come up with the final rankings:

• Annual revenue, which represents 10 percent of the final score. For banks, revenue is determined by adding net interest income and noninterest income.

• Year-over-year revenue change (15 percent).

• Annual percent change in profit margin, based on net income available to common shareholders (15 percent).

• Return on equity (30 percent), or how much profit is produced on shareholders' investment.

• Total return for calendar 2006 (30 percent), or the change in stock price assuming any dividends were reinvested in the company's shares.

The companies are ranked for each of these measures. The overall ranking is then determined by totaling the five variable rankings for each company and dividing by five.

Unlike most scoring, smaller is better in this case — the lower the final score, the higher the rank.

Profit numbers used to rank the companies are from continuing operations, net of any preferred dividends, and excluding income or loss from discontinued operations as well as changes in accounting principles.

While total return was for calendar 2006, all other financial data are for the companies' fiscal years, even if different from the calendar year. In most cases, the fiscal and calendar years coincide.

The Georgia 100 report includes specialized lists other than the principal 100, where the names of companies not on the 100 often show up. These lists rank companies by revenue, return on equity, profit and total return, among others.

The purpose of the Georgia 100 is not to give bragging rights to companies on the list — although that happens. The information in this section is intended to be a starting point for an investor's money management.

Investors are expected — urged — to do more homework before they add one or more of these companies to a portfolio, or delete it, as the case may be.