What is Fortune 500
Fortune 500 is Fortune magazine's yearly list of 500 of the largest US companies ranked by total revenues for their respective fiscal years. The list is compiled 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
The survey includes companies that are incorporated and operate in the United States and file financial statements with government agencies. It excludes private companies not filing financial statements with government agencies, foreign corporations, US companies consolidated by other companies, and companies that neglect to report full financial statements for at least three quarters of the current fiscal year.
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 list was published. The idea for the list came from Edgar P. Smith, an assistant managing editor for Fortune magazine. 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 (GM) was the top company with annual revenues 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, but it also included service companies for the first time.
This change in 1994 greatly impacted the Fortune 500 list going forward. For example, in that year, service companies 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 4, AT&T was number 5, and Sears Roebuck & Co. was number 9. Wal-Mart has spent several years at number 1, a position it would not have held if this change had not occurred.
The 2018 Fortune 500 featured Wal-Mart as the top American company with $500.3 billion in revenue. General Motors has been on the list since its debut in 1955 and was the 10th-highest (dropping from the eighth position) revenue-producing company with $157.3 billion. Notably, Tesla was recognized as having the biggest jump from 260 to 123. Other than ranking the most profitable, the list identifies its newcomers, the biggest employers, and biggest jumps. On Fortune's website, users can filter results in many ways, such as identifying companies with female CEOs, founders as CEOs, marked growth in jobs, et al.