Supporting Statement QFR OMB Part B

B.

Collections of Information Employing Statistical Methods
1. and 2. Description of the Sample/Procedures for Collection
The frame from which the major portion of the QFR sample is selected consists of the IRS
file of those corporate entities which are required to file Form 1120, 1120A or 1120S and
which also have as their principal industrial activity either Manufacturing, Mining, or
Wholesale or Retail trade. The IRS file is sampled once each year. At the time the sample is
selected, the file does not contain those corporate entities whose first income tax return has
not been processed. In addition, several months elapse between the selection of this sample
and its introduction into the QFR Program.
To keep the QFR sample up-to-date, staff reviews current corporate news releases and public
records to identify any potential additions and changes to the target population. Corporations
thus identified and thought to meet QFR in-scope criteria are contacted to verify their inscope status. If determined to be in-scope of the QFR, the corporation will automatically be
included in the survey sampling fraction for the remainder of the sample year.
About 25% of the cases initially sampled are outside the scope of the QFR industry
designation or are included in companies already reporting in the sample. The survey
estimator adjusts for the resulting reduction in the sample.
Nearly all corporations whose operations are within the scope of the QFR and which
have total assets greater than $250 million are included in the sample. They are permanent
sample members, with a one-out-of-one sampling fraction. In addition, receipts cut-off values
are determined on an industry basis. If a corporation has receipts at or above the receipts cutoff value for their industry, that corporation is made a permanent sample member, with a
one-out-of-one sampling fraction.
In those industry-size strata for which the sampling fraction is less than one-out-of-one, a
replacement scheme is used which provides that one-eighth of the sample is replaced each
quarter. Corporations removed are those that have been in the reporting groups the longest
(usually eight quarters). Therefore, samples of small and medium size corporations for
adjacent quarters are seven-eighths identical; for quarters ending 9 months apart, they are
five-eighths identical, etc.
These statistical procedures yield a sample of corporations that are considered potential
respondents. After an initial screening, and if the company is found to be within the scope of
the program, filing of the QFR report form is required.
The QFR report form response rates differ by size category. In all categories, companies
with assets of $250 million and over achieve response rates of about 81 percent.
Nonrespondents from this group are imputed for, by using previously filed reports or industry
averages for similar size companies. Companies below the $250 million asset level respond
at a lower rate, about 63 percent. Nonrespondents from this group are accounted for by
adjusting the sample weights of the respondents. The over-all coverage rate, defined as the

percentage of published total assets represented by data from respondents, is over 89 percent.
This level is adequate to support the precision requirements of the survey.
The following table summarizes the resulting sample size by industry division and size
groups.

Composition of the Sample, by NAICS Sector and Size of Total Assets
Third Quarter 2006
Manufacturing1
Mining2
Number of
Asset size
3
3
All asset sizes
Under $10 million
$10 million and over
$10 million to $25 million
$25 million to $50 million
$50 million to $100 million
$100 million to $250 million
$ 250 million to $1,000 million
$1,000 million and over

Total assets
Million dollars Percent
6,160,979
100
170,684
3
5,990,295
97
101,257
2
69,203
1
99,810
2
148,183
2
410,382
7
5,161,459
84

active corps.
in sample4
6,950
3,102
3,848
995
446
466
529
735
677

Wholesale trade2

All asset sizes
Under $10 million
$10 million and over
$10 million to $25 million
$25 million to $50 million
$50 million to $100 million
$100 million to $250 million
$250 million to $1,000 million
$1,000 million and over

Total assets3
Million dollars Percent
680,394
100
325
0
680,070
100
1,103
0
7,202
1
34,862
5
61,034
9
135,456
20
440,413
65

Number of
active corps.
in sample6
949
22
927
19
64
222
258
248
116

____________________________________________________
1

Includes manufacturing corporations with assets $250 thousand and over.
Includes mining and trade corporations with assets $50 million and over.
3
Estimated universe total; figures are rounded and will not necessarily add to totals.
4
Drawn from a universe of approximately 157,000.
5
Drawn from a universe of approximately 450.
6
Drawn from a universe of approximately 1,700.
7
Drawn from a universe of approximately 1,100.
8
Composition of sample, second quarter 2006, revised.
Source: U.S. Census Bureau, Quarterly Financial Report, QFR/06-Q3
2

2

Total assets
Million dollars
Percent
468,332
100
5
0
468,327
100
178
0
491
0
3,793
1
9,464
2
31,168
7
423,233
90

Number of
active corps.
in sample5
195
1
194
3
5
23
33
48
82

Retail Trade2 8
Total assets3
Million dollars
Percent
893,909
100
166
0
893,742
100
760
0
3,053
0
18,099
2
28,539
3
81,841
9
761,451
85

Number of
active corps.
in sample7
557
18
539
17
30
120
111
141
120

The QFR aggregates and ratios are estimated each quarter. Each estimate has its own
standard deviation, which indicates the difference that can be expected between the
estimate derived from sampling and a comparable total based on a complete canvass. An
estimate will differ from a comparable total based on a complete canvass by less than one
standard deviation approximately 68 times out of 100, by about 1.6 standard deviations
approximately 90 times out of 100, and by about 1.96 standard deviations approximately 95
times out of 100. The sample was designed so that one standard deviation of the estimate for the
item, "Income (or loss) before taxes," for all manufacturing corporations amounts to
approximately one-half of 1 percent of that estimated aggregate and approximately 2 percent of
that estimated aggregate for mining, wholesale, and retail trade corporations. However, sample
size reductions made for the purpose of minimizing corporate reporting burden have caused an
erosion in precision.
Each QFR report form received is reviewed by QFR staff accountants for adherence to GAAP,
and QFR guidelines. Should QFR requirements dictate a classification of data different from the
reporting corporation's report the accountant is responsible for reclassifying or adjusting the data
item(s). If complex problems arise, officials of the reporting corporation are contacted to discuss
proposed adjustments.
3. Methods to Maximize Response
A set of QFR report forms is mailed during the last month of a company's quarter. Upon
expiration of the 25-day filing requirement, a letter advising the company of its delinquency is
mailed. In the event of continued noncompliance, companies are contacted by telephone and
advised of the report's mandatory nature. This follow-up process results in an acceptable
response rate.
4. Testing
Forms and methods used in the QFR program are subject to continued informal assessments.
They have been refined as warranted to reflect changed conditions in the private sector and
improved data program practices. The program has close to 60 years experience collecting this
information. The information requested is easily accessible by reporting corporations, and the
burden associated with completing these forms is not considered significant.
The QFR report forms are in traditional corporate income statement and balance sheet formats.
Reporting rules conform, for the most part, to GAAP and financial statement presentation. The
QFR report short form was developed and introduced in 1981. The short form (a simplified
version of the long form) was developed in response to comments from small companies and
representatives of small businesses.

3

5. Consultations on Statistical Design
In July 1998 the QFR's statistical methods were evaluated in accordance with OMB Directive
No. 3, and the completed evaluation clearly supports continuation of the current methodology.
In addition, the QFR's primary users, the BEA and FRB, have expressed continued satisfaction
with the reliability of this data series for estimation of the corporate profits component of the
GDI and the Flow of Funds accounts respectively.
Mr. John P. Seabold, Chief of the Corporate Analysis Branch for the Quarterly Financial Report
Program, is responsible for collection and analysis of QFR data. He can be reached at telephone
number (301) 763-3386. Mr. Mark Sands, Chief of the Statistical Research & Method Branch is
responsible for oversight of and consultation regarding the QFR statistical methods. He can be
reached at telephone number (301) 763-3310.

List of Attachments

A. Forms Used in Conducting the QFR Program:
QFR-200 (MT) and instructions QFR-200 (I)
QFR-201 (MG) and instructions QFR-201 (I)
B. Cover Letters:
QFR-006 (L1)
QFR-29 (L2)

4