What is the 'Fortune 500'

The Fortune 500 is an annual list of the 500 largest companies in the United States as compiled by Fortune magazine. The list is put together using the most recent figures for revenue and includes both public and private companies with publicly available revenue data. To be a Fortune 500 company is widely considered to be a mark of prestige.

BREAKING DOWN 'Fortune 500'

More than 1,800 American companies have been featured on the Fortune 500 list over the course of its history. The list has changed dramatically from the first Fortune 500 published in 1955. Mergers and acquisitions, shifts in production output and bankruptcies have taken companies off of the list. The impact of a recession can also take out multiple companies from individual sectors. The Fortune 500 list can often be a telling sign of how strong the economy is or if there has been an economic recovery after poor performing years.

The First Fortune 500

In 1955, the first Fortune 500 was published. The idea for the list came from Edgar Smith, an assistant managing editor for Fortune. Smith's idea took off and provided the grounds for the popular annual list.

The original Fortune 500 lists contained only companies that were in the manufacturing, mining and energy sectors, limiting inclusion for many big-name companies. In the original 1955 Fortune 500 list, General Motors was the top company with annual revenue of $9.8 billion. To secure a spot on the list, a company had to produce $49.7 million in annual revenue.

The Big Change in 1994

In 1994, the Fortune 500 underwent its biggest change. The new list continued to include companies from the original manufacturing, mining and energy sectors, and it also included service companies for the first time.

This change in 1994 greatly impacted the Fortune 500 list going forward. In the first year service companies were included, they made up 291 of the 500 entries. Three of the newly included service companies even made the top 10 listings in the Fortune 500. Wal-Mart was number four, AT&T was number five and Sears, Roebuck & Co. was number nine. Wal-Mart has spent several years at number one, a position it has not held if this change had not occurred.

How the List Has Grown

The 2015 Fortune 500 featured Wal-Mart as the top American company with $482.1 billion in revenue. General Motors, which topped the first and more than 30 Fortune 500 lists, was the eighth-highest revenue-producing company with $152.4 billion. To gain a spot on the list, companies had to have revenue of $5.1 billion or more.

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