Definition
The Fortune 500 is an annual ranking published by Fortune magazine that lists the 500 largest U.S. industrial (manufacturing) corporations based on revenue. In addition, Fortune publishes the Fortune Service 500, which ranks the 500 largest U.S. nonmanufacturing companies. These rankings are highly regarded and provide significant insight into the financial robustness and market performance of American corporations.
Forbes magazine also publishes annual rankings of the 500 biggest U.S. publicly owned corporations, offering a complementary perspective to the Fortune 500 listings.
Examples
Here are a few examples of companies that have consistently appeared on the Fortune 500 list:
- Walmart Inc.: Frequently topping the list due to its massive revenue from retail operations.
- Amazon.com Inc.: Known for its extensive e-commerce, cloud computing, and digital streaming services.
- Apple Inc.: Renowned for its consumer electronics, software, and online services.
- Exxon Mobil Corporation: A leading company in the oil and gas industry.
Frequently Asked Questions (FAQs)
What criteria are used for ranking companies in the Fortune 500?
Companies are ranked based on their total revenue for the fiscal year, including gross sales and other income sources.
How often is the Fortune 500 list updated?
The list is updated annually.
Is the Fortune 500 ranking limited to a specific industry?
The Fortune 500 primarily focuses on industrial (manufacturing) corporations, while the Fortune Service 500 ranks nonmanufacturing companies.
What is the difference between the Fortune 500 and the Fortune Global 500?
The Fortune 500 lists the largest U.S. corporations by revenue, whereas the Fortune Global 500 ranks the largest companies worldwide based on revenue.
Can a new company appear on the Fortune 500 list?
Yes, any U.S. company that meets the revenue criteria within a fiscal year can appear on the list.
- Fortune Global 500: A ranking of the top 500 corporations worldwide, as measured by revenue.
- Forbes Global 2000: An annual ranking of the world’s top 2000 public companies by Forbes magazine, based on a mixture of revenue, profit, assets, and market value.
- S&P 500: An index comprising 500 of the largest publicly traded companies in the United States, often used as a benchmark for the overall stock market.
Online References
Suggested Books for Further Studies
- “Inside The Fortune 500: How the World’s Largest Companies Achieve Success” by Tommy Oliver.
- “Good to Great: Why Some Companies Make the Leap…And Others Don’t” by Jim Collins.
- “Built to Last: Successful Habits of Visionary Companies” by Jim Collins and Jerry I. Porras.
- “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail” by Clayton M. Christensen.
Fundamentals of Fortune 500: Management Basics Quiz
### What is the primary basis for a company's inclusion in the Fortune 500 list?
- [x] Total revenue for the fiscal year
- [ ] Number of employees
- [ ] Market capitalization
- [ ] Profit margins
> **Explanation:** Companies are ranked on the Fortune 500 list based on their total revenue for the fiscal year.
### How often is the Fortune 500 list published?
- [x] Annually
- [ ] Bi-annually
- [ ] Quarterly
- [ ] Monthly
> **Explanation:** The Fortune 500 list is updated and published annually, reflecting the financial performance of companies over the preceding year.
### Which publication also provides a similar annual ranking of U.S. publicly owned corporations?
- [x] Forbes
- [ ] Business Insider
- [ ] The Wall Street Journal
- [ ] Barron's
> **Explanation:** Forbes magazine publishes an annual list of the 500 biggest U.S. publicly owned corporations, offering a complementary ranking to Fortune's.
### Can new companies be included on the Fortune 500 list?
- [x] Yes
- [ ] No
- [ ] Only if they are a startup
- [ ] Only if they belong to a specific industry
> **Explanation:** Any U.S. company that qualifies based on revenue criteria can appear on the list, irrespective of its previous ranking status.
### What is the main difference between the Fortune 500 and the Fortune Global 500?
- [ ] One is for tech companies and the other for non-tech companies.
- [ ] One is based on profit, the other on personnel number.
- [x] One ranks U.S. companies, the other ranks companies worldwide by revenue.
- [ ] There is no significant difference.
> **Explanation:** The Fortune 500 ranks the largest U.S. corporations by revenue, while the Fortune Global 500 ranks companies worldwide based on revenue.
### What type of companies does the Fortune Service 500 rank?
- [ ] Manufacturing companies
- [x] Nonmanufacturing companies
- [ ] Startups
- [ ] Tech companies
> **Explanation:** The Fortune Service 500 ranks the largest U.S. nonmanufacturing companies.
### Which sector has historically had many companies on the Fortune 500 list?
- [x] Oil and Gas
- [ ] Retail sporting goods
- [ ] Public relations
- [ ] Educational services
> **Explanation:** The oil and gas sector has historically been well-represented on the Fortune 500 list due to the high revenues associated with this industry.
### What combination of metrics does Forbes use for its Global 2000 ranking?
- [x] Revenue, profit, assets, and market value
- [ ] Sales, market share, and growth potential
- [ ] Only revenue
- [ ] Employee satisfaction, revenue, and social impact
> **Explanation:** Forbes Global 2000 uses a combination of revenue, profit, assets, and market value to rank the world's top companies.
### In which year was the first Fortune 500 list published?
- [ ] 1990
- [x] 1955
- [ ] 2005
- [ ] 1980
> **Explanation:** The first Fortune 500 list was published in 1955.
### Which retail giant is known for frequently appearing at the top of the Fortune 500 list?
- [x] Walmart Inc.
- [ ] Target Corporation
- [ ] Best Buy Co., Inc.
- [ ] Costco Wholesale Corporation
> **Explanation:** Walmart Inc. is often at the top of the Fortune 500 list due to its vast revenue from the retail sector.
Thank you for exploring the complexities and features of the Fortune 500 ranking. Your understanding of corporate rankings helps to grasp the financial environment’s dynamics.
