This year's Georgia 100 is made up of companies ranging in size from less than $50 million in market value (share price times shares outstanding) to as much as $140 billion. They also are in a wide variety of businesses.

How, then, can companies this varied be compared with each other, and even ranked from one to 100?

It looks like a race between a thoroughbred and a pony.

One way to compare companies is by size, using a benchmark such as annual revenue. That's the approach of the oldest and most famous annual ranking, the Fortune 500.

That approach works for Fortune because all the companies in its universe are big.

The 500th company on the latest Fortune 500, Scana, posted 2007 revenue of $4.62 billion.

Only 12 of the Georgia 100 companies were that big.

The great majority of Georgia public companies are "smallcaps" and "midcaps," as Wall Streeters say.

Another way to rank companies is by percentage change from year to year in some variable such as profits or sales.

While that seems fair, it gives smaller companies an unfair advantage, since they can post big percentage changes on comparatively small numerical changes.

The solution chosen by the annual Georgia 100 is to use a mix of absolute and percentage approaches, designed to look at how these diverse companies performed as businesses.

"Performance" is defined as what a company's management does with the resources it had in the same economic environment.

The process begins with a list of all companies that are technically "public" — those that sell stock to the public.

But by the time they are measured against minimum standards such as market value, share price, trading frequency, and sometimes pending legal or accounting issues, some are weeded out.

Companies that fail to file relevant financial documents with the Securities and Exchange Commission by the newspaper's deadline are also omitted.

A case in point this year is Beazer Homes USA, an Atlanta-based homebuilder that had been in the Top 10 five times since 2001, but this year was hit hard by the U.S. housing slump and mortgage crisis.

The next step occurs in the Atlanta offices of PricewaterhouseCoopers LLP, the international accounting and business consulting firm. PWC accountants retrieve the relevant financial data from the firms' annual 10-K reports filed with the SEC.

The analysts apply 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 non-interest 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 by management on shareholders' investment.

• Total return for calendar 2007 (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 variables. 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.

While total return was calculated for calendar 2007, all other financial data are for the companies' 2007 fiscal years, even if different from the calendar year. In most cases, the fiscal and calendar years coincide.

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.