(FORTUNE Magazine) – As decades go, this one was no day at the beach. While the economy's expansion set a new peacetime record, companies on the 500 strained harder than ever just to hold their ground. Measured in constant dollars, total sales were only 7.1% higher in 1989 than in 1979. Real profits ended up 3.6% lower. All in all, not much to show for ten years of back-breaking effort, particularly set against the giddy increases of the 1960s and 1970s. Why the slowdown? Falling oil prices are one reason. In 1979 petroleum- refining companies accounted for 26% of the 500's sales and 29% of earnings; in 1989 those shares were 17% and 15%, respectively. And fiercer foreign competition, abetted in the first half of the decade by the strong dollar, shriveled revenue growth and profit margins among many U.S. manufacturers. The d and r words -- debt and restructuring -- were also rallying cries in the 1980s. When the decade began, companies on the 500 supported $2.17 in assets with a dollar of equity; by 1989 rising debt had lifted that ratio to 3.18. Says Glenn Hubbard, a professor of finance at Columbia University's business school: ''What's disturbing is not just that the average level is up, but that a number of companies are very highly leveraged.'' By decade's end, restructuring had pared 3.7 million workers from the payroll. The 21% decline in 500 employment since 1980 was considerably steeper than the drop in total U.S. manufacturing jobs.

What companies fared best in these tough times? ConAgra, the decade's sales leader, expanded by feverish acquisitions. But No. 2 Digital Equipment's 21.7% average annual sales increases reflect strictly internal growth. Big one-time gains from the sale of cable TV holdings in 1989 boosted New York Times and Dow Jones to the top of the profit table. Still, Dow Jones's consistency is front-page news; it has averaged a 25% return on equity over the past ten years.

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