THIs empirical study extends the author's earlier investigation of the relation- ship between the profitability and size of United Kingdom-based quoted manufacturing companies for the period I948-60 (Whittington [20]). The following extensions are made:

I. The time period studied is I960-74.

2. Greater attention is paid to the inter-temporal variability of profitability, which was previously studied only for a restricted range of industries and for one measure variability.

3. A greater variety of profitability and size measures is used. This is due to the fact that, since the I967 Companies Act, companies have had a statutory obligation to publish aggregate sales and wages, the latter enabling us to estimate value added.

This study is not, however, as detailed as the earlier study in certain respects. In particular, only a limited number of relationships have been investigated at the industry level, and there are no tabulations of the average and standard deviation of profitability classified by various size classes.