The Fortune 500 is an esteemed annual ranking of the 500 largest U.S. companies, categorized by their total revenues for the previous fiscal year. Established and published by Fortune magazine, this coveted list includes both public and private for-profit companies, and has been influential in identifying the most prominent players in the American economy.
Key Takeaways
- The Fortune 500 ranks the largest U.S. companies based on total revenues.
- The list has been compiled annually since 1955.
- Being on the list is prestigious, indicating high-quality firms.
- In 2024, Walmart continued to hold the top position for the 12th consecutive year.
Understanding the Fortune 500
Fortune magazine, founded in 1929 by Henry Robinson Luce, began publishing its first issue in 1930, quickly establishing itself as a leading business publication. The Fortune 500 was initiated in 1955 under the guidance of editor Edgar P. Smith. At a time when the U.S. economy was a global beacon of power, the list aimed to highlight the size and influence of American businesses. Originally titled the Fortune Industrial 500, it was later abbreviated to the more recognizable Fortune 500.
Selection Criteria
To qualify for inclusion in the Fortune 500, companies must be:
- Incorporated and operate in the U.S.
- For-profit organizations.
- Filers of financial statements with the government.
From a pool of eligible companies, the 500 with the highest recorded revenues for their respective fiscal years as reported in their 10-K filings make the cut. Notably, companies that do not disclose their financials or are structured as foreign entities are not eligible for the list.
Impact on Investment
Many companies featured on the Fortune 500 also appear on the S&P 500 index, making it a reliable choice for investors looking to invest in leading U.S. corporations. Index funds that include S&P 500 companies can provide broad exposure to profitable entities across various sectors.
Evolution of the Fortune 500
Since its inception, the Fortune 500 has experienced significant changes. Over 2,200 companies have appeared on the list throughout its history. Factors such as mergers and acquisitions, economic recessions, and changing consumer demands can dramatically impact which companies make the list in any given year.
- 49 companies have maintained their presence on the list every year since its inception in 1955.
Fortune 500 2024 Highlights
In the 2024 Fortune 500, Walmart once again claimed the top position with revenues of $648 billion, marking the retailer's 12th consecutive year at number one. Here are some highlights:
- Amazon ranked second with revenues of $575 billion.
- Apple rounded out the top three with revenues of $383 billion.
- Other notable entries include UnitedHealth Group and Berkshire Hathaway taking the fourth and fifth spots, respectively.
- The list also featured 14 new entries, including exciting newcomers like DoorDash and Monster Beverage.
Historical Context
The original Fortune 500 list predominantly featured companies in manufacturing, mining, and energy. The numbers have evolved since its inception; for instance:
- General Motors topped the inaugural list with annual revenues of $9.8 billion, while the lowest-ranked company recorded just $49.7 million.
- The most significant restructuring occurred in 1995, when Fortune expanded the list to include service industries, leading to a dramatic increase in the representation of non-manufacturing companies. By that year, service companies accounted for 291 out of 500 entries.
Significance of the Fortune 500
The distinction of being labeled a Fortune 500 company carries substantial weight. It symbolizes business success, indicating not only revenue generation but also market influence and consumer trust—key indicators of a company's reach in the economy.
Conclusion
The Fortune 500 remains a definitive metric for assessing the health and stature of American corporations. Each year, aspirations to join this elite list drive companies to innovate and expand, making it a crucial barometer for economic performance in the U.S. Whether for investment opportunities or business strategy insights, the Fortune 500 continues to attract attention and interest from stakeholders across sectors.