This paper examines the impact of year, industry, corporate-parent, and business-specific effects on the profitability of U.S. public corporations within specific 4-digit SIC categories. The study uses comprehensive data from the Compustat Business Segment Reports for 1981 through 1994, covering all sectors of the American economy except finance. The analysis employs enhanced statistical methods to decompose the variance in profitability into components associated with these effects. Key findings include: - Year, industry, corporate-parent, and business-specific effects account for 2%, 19%, 4%, and 32% of the total variance in profitability, respectively. - The importance of these effects varies across economic sectors, with industry effects being more significant in manufacturing but less so in lodging/entertainment, services, wholesale/retail trade, and transportation. - A negative covariance is found between corporate-parent and industry effects, suggesting that corporate parents have a greater positive influence in unattractive industries. - The study uses both components-of-variance (COV) estimation and nested ANOVA methods to analyze the data, providing insights into the relative significance of each type of effect. The results suggest that industry membership has a substantial influence on profitability, with stable industry effects accounting for nearly 19% of the variance in business segment profits. The study also highlights the importance of corporate parents and business-specific factors, with corporate-parent effects explaining nearly 4% and business-specific effects explaining nearly 32% of the variance.This paper examines the impact of year, industry, corporate-parent, and business-specific effects on the profitability of U.S. public corporations within specific 4-digit SIC categories. The study uses comprehensive data from the Compustat Business Segment Reports for 1981 through 1994, covering all sectors of the American economy except finance. The analysis employs enhanced statistical methods to decompose the variance in profitability into components associated with these effects. Key findings include: - Year, industry, corporate-parent, and business-specific effects account for 2%, 19%, 4%, and 32% of the total variance in profitability, respectively. - The importance of these effects varies across economic sectors, with industry effects being more significant in manufacturing but less so in lodging/entertainment, services, wholesale/retail trade, and transportation. - A negative covariance is found between corporate-parent and industry effects, suggesting that corporate parents have a greater positive influence in unattractive industries. - The study uses both components-of-variance (COV) estimation and nested ANOVA methods to analyze the data, providing insights into the relative significance of each type of effect. The results suggest that industry membership has a substantial influence on profitability, with stable industry effects accounting for nearly 19% of the variance in business segment profits. The study also highlights the importance of corporate parents and business-specific factors, with corporate-parent effects explaining nearly 4% and business-specific effects explaining nearly 32% of the variance.