What Is the Fortune 1000?

The Fortune 1000 is an annual list of the 1000 largest American companies maintained by the popular magazine Fortune. Fortune ranks the eligible companies by revenue generated from core operations, discounted operations, and consolidated subsidiaries. Since revenue is the basis for inclusion, every company is authorized to operate in the United States and files a 10-K or comparable financial statement with a government agency.

The list does not contain private organizations as they generally withhold information from the public. Other companies excluded from the list include those that fail to report full financial statements for at least three quarters in the current fiscal year.

Key Takeaways

  • Published by Fortune magazine, the Fortune 1000 is a list of the largest US incorporated companies, as well as companies authorized to conduct business in the US.
  • Excluded from the rankings are private companies and companies that do not fully report their financial positions for at least three quarters in the current fiscal year.
  • Rankings are based on revenues generated from core operations, discounted operations, and consolidated subsidiaries.
  • The Fortune 500 list overshadows the Fortune 1000 list in part because of the near-constant change of lower-level companies on the 1000 list. 

Understanding the Fortune 1000

The Fortune 1000 is still considered an important and prestigious list despite receiving considerably less notoriety than the more selective Fortune 500 rankings. The annual list draws significant interest from readers who follow the business sector and seek to learn about the influential leaders in the US economy.

Notably, Walmart (WMT) has topped the list for eight of the past 10 years, unseated only by ExxonMobil (XOM) in 2009 and 2012 when oil prices reached near term highs.

Many investors view a fall in rank or failure to make the list as a sign of weakness for a company or an industry, whereas a move higher portends strength. Since revenue dictates this the list, many of the companies at the top offer products that serve most people. Some of the products can include groceries and clothing found at Walmart, gas to fuel a vehicle from an ExxonMobil station, or the widely owned iPhone produced by Apple (AAPL). For this reason, many business-to-business (B2B) software companies are unable to crack the upper echelons of the list.

California has the highest number (118) of Fortune 1000 companies among all states, and New York City has the highest number (74) of all US cities as of 2018.

Criticism of the Fortune 1000

The Fortune 1000 list offers a valuable gauge to the current state of the business sector. Yet, the Fortune 500, which measures the top 500 companies measured by revenue, overshadows this list. In many ways, the rapid turnover of companies listed near the bottom of the Fortune 1000 limits it from gaining the same mainstream acceptance as the smaller Fortune 500 list.

For many years, researchers equated turnover as a proxy for positive economic churn and underlying strength in innovation and productivity. However, high churn isn't always a signal of strong business growth; instead, it can mean an active merger and acquisition (M&A) environment, where large corporations purchase small companies.