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What is the Fortune 500?

Elva K.
Elva K.

The Fortune 500 list, compiled since 1955 via Fortune magazine, includes the 500 highest ranking United States public corporations. Rankings of these companies tend to be based on revenue figures associated with each company's prior fiscal year after adjustments are made to exclude impact of the excise taxes that the companies collect. This list includes both publicly held and privately held companies where the revenues are made publicly available. The names of companies that are on this list tend to reflect extreme wealth and power.

Typically the location, phone numbers, and the chief executive officers' names are listed. Also, these companies in the Fortune 500 list are ranked using 12 separate indices. Among these indices are revenues, assets, profit, stockholder equity, profit as percentage of revenue, and market value. Also included in the indices are stockholder equity, 10-year earning per share growth, total returns to investors during the year, and the 10-year annual total return to investors. The companies are additionally ranked by their performance within states and within 61 separate industry groups.

Man climbing a rope
Man climbing a rope

If there are no financial reports for a company for one quarter year or more, the company is not eligible for consideration to be included in the Fortune 500. Also, businesses that are privately held that fail to submit a financial statement to the United States government are not eligible for consideration. Foreign corporations are not included either.

Originally, the Fortune 500 was restricted to companies whose revenues were made from mining, manufacturing, or energy explorations. In the past, there were separate Fortune 50 lists that included the 50 largest banks, utilities, life insurance businesses, retailers, and transportation companies. Now, all companies have been combined to form one list.

Looking at the Fortune 500 listing enables one to gain a sense of the United States' commercial progress as it unfolds. It enables one to gain a better understanding of where money has been in the past and how money has flowed into new industries through the years. The corporations that comprise the Fortune 500 have a lot of power and they influence government policy regularly. In fact, the Fortune 500 companies are often considered the most successful companies.

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