What exactly are Fortune 500 companies?

Fortune 500 is a yearly list made annually by Fortune magazine, ranking the top 500 US companies based on their combined revenue from the last fiscal year. It’s a widely regarded bellwether of corporate strength and a company’s presence on the list is regarded as a significant sign of distinction.

All you need to know about Fortune 500 companies

The criteria

To qualify for the list, a business must be a for-profit US-based corporation operating in the United States. Public and private companies are both eligible, provided they submit financial statements to a US government agency. The list ranks companies strictly by total revenue, not profit, market cap or other criteria. This is why you'll sometimes find companies that reported a net loss still included.

A brief history

The origins of the list date back to 1955 when it was introduced by Fortune magazine editor Edgar P. Smith. It was initially known as the Fortune Industrial 500 and only featured firms in the manufacturing mining and energy industries. This did not include gigantic businesses like retailers and banks.

Still, in 1995 the list made its greatest transformation to date when it started adding companies of all industries. The change was a representation of the evolving American economy and introduced service titans such as Walmart onto the list, a corporation that has spent several years atop the list.

What it means

It’s a big deal to be a Fortune 500 company. These companies combined produce trillions of dollars in revenue and have a substantial impact on the global economy. They drive stock markets, employment patterns and economic policy. The list provides a primary measure of corporate excellence and a means of enabling companies to compare themselves to the very best. Although the top positions tend to be a war between household names such as Walmart, Amazon and Apple, the list varies from year to year, providing an interesting snapshot of the world as it is today.

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