United States yearbook - 1982 (1)

Section 18
Business Enterprise
This section relates to the place and behavior of the business firm, and to business initiative in
the American economy. It includes data on the number, type, and size of businesses; financial data
of domestic and foreign affiliates of U.S. corporations; business investment, expenditures, and profits;
business sales and inventories; consumer cooperatives; and mergers, acquisitions, and business
failures. Additional business data may be found in other sections, particularly 29 and 30.
The principal sources of these data are the Su rvey o f C u rren t B usiness, published by the Bureau
of Economic Analysis (BEA); the F e d e ra l R e s e rve B ulletin , issued by the Board of Governors of the
Federal Reserve System; the annual S tatis tic s o f In co m e reports of the Internal Revenue Service
(IRS); Th e F a ilu re R e c o rd Through (Y e a r), issued by Dun & Bradstreet, New York; and F o rtun e and
The F o rtun e D irecto ry , issued by Time, Inc., New York. Other sources are publications of the Securities
and Exchange Commission (SEC), the Federal Trade Commission (FTC), and the Administrative
Office of the United States Courts.
Business firms.—A firm is generally defined as a business organization under a single management
and may include one or more establishments (i.e., a single physical location at which business
is conducted). The terms firm, business, company, and enterprise are used interchangeably
throughout this section. A firm doing business in more than one industry is classified by industry
according to the major activity of the firm as a whole. The industrial classification is based on the
S tan d a rd In d u s tria l C las sific atio n (S IC ) M a n u a l (se e text, page 372).
The IRS concept of a business firm relates primarily to the legal entity used for tax reporting
purposes. The IRS S ta tis tic s o f In co m e reports present data, based on a sample of tax returns
before audit, separately for sole proprietorships, partnerships, and active corporations. A sole p ro ­
prietorship Is an unincorporated business owned by one person. Sole proprietorships Include the
entire range of unincorporated, one-owner businesses, farms, and professional practices, from large
enterprises with many employees and hired managers to the part-time operations in which the
owner is the only person involved. A p a rtne rs h ip is an unincorporated business owned by two or
more persons, each of whom has a financial interest in the business. The "persons" could be individuals,
estates, trusts, or corporations. A co rporatio n is a business that is legally incorporated
under State laws. The IRS recognizes many types of businesses as corporations, Including jointstock
companies; mutual and other insurance'companies; and unincorporated associations such as
business trusts, mutual savings and loan associations, certain partnerships, mutual savings banks,
and cooperative banks. While many corporations file consolidated tax returns, most corporate tax
returns represent individual corporations, sortie of which are affiliated through common ownership
or control with other corporations filing separate returns.
Assets and liabilities.—In Its annual report, S tatis tic s o f In com e, C orporation In com e Tax Re ­
turns, the IRS presents balance sheet and income estimates for all active U.S. corporations. The
FTC issues 2 current reports, the Q u a rte rly F in a n c ia l R e p o rt fo r M anufacturing, M ining a n d Trade
C orporations, which presents quarterly income account and balance sheet data for manufacturing,
mining, and trade industries, and the W orking C a p ita l o f U .S. N o n fin a n c ia i C orporations, which presents
data on components of current assets and liabilities of all nonfinanciai U.S. corporations.
One of the most comprehensive measures of the investment position of the business sector (and
the only measure adjusted to current replacement cost) is the BEA capital stock series. See F ixed
R ep roducible T ang ible W ealth in th e U n ite d S tates, 1 9 2 5 -7 9 , and periodic updates in the Su rvey o f
C urrent Business.
Income, profits, dividends, and taxes.—Several agencies, among them IRS and BEA, compile
corporate income account data. These data, however, are not comparable because of differing
methods of compilation. A reconciliation of the two can be found In table 8.12 of N a tio n a l incom e
a n d P rodu ct A cc o u n ts o f th e U n ited S tates, 1 9 2 9 -7 6 , and Su rvey o f C u rre n t B usiness (normally the
July issue), published by BEA. The IRS publishes financial data for all business enterprises. These
525