Forbes 500
Encyclopedia
The Forbes 500 was an annual listing of the top 500 American
companies produced by Forbes Magazine. The list was calculated by combining five factors: sales, profits, assets, market value, and employees. The list was last issued in March 2003 (based on 2002 data for the companies); it is no longer calculated each year and has been replaced by the Forbes Global 2000
, which includes non-U.S. companies but is calculated on a similar basis as the old Forbes 500 (although it does not include employees).
The value of the assets is indicated through the ability to generate cash through their ownership or control. Banks tend to have large assets (loans are assets).
When looking at profit
a company like Goldman Sachs
, which has 35,400 employees is of equal size with Walmart which has 2.1 Million employees and has many tangible assets.
Fortune 500
ranks companies by revenue. This method is heavily biased towards distributors such as Walmart, which may have a high volume of sales but may be operating on very thin profit margin
s.
Another method might be to look at the market capitalization
of the company. However, this price is dictated by the perceived value of the company and its prospects. Thus, in the late nineties, Cisco Systems
would have been the biggest company by this measure. When the dot-com bubble
crashed, Cisco's perceived value changed dramatically.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
companies produced by Forbes Magazine. The list was calculated by combining five factors: sales, profits, assets, market value, and employees. The list was last issued in March 2003 (based on 2002 data for the companies); it is no longer calculated each year and has been replaced by the Forbes Global 2000
Forbes Global 2000
The Forbes Global 2000 is an annual ranking of the top 2000 public companies in the world by Forbes magazine. The ranking is based on a mix of four metrics: sales, profit, assets and market value...
, which includes non-U.S. companies but is calculated on a similar basis as the old Forbes 500 (although it does not include employees).
Quantifiying the largest companies
Different methods exist to determine the largest corporations. Forbes use a balance of the profit, revenue, market capitalization and value of assets of corporations. The size of any one of these factors is not indicative of the size of any other factor.The value of the assets is indicated through the ability to generate cash through their ownership or control. Banks tend to have large assets (loans are assets).
When looking at profit
Profit (accounting)
In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...
a company like Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, which has 35,400 employees is of equal size with Walmart which has 2.1 Million employees and has many tangible assets.
Fortune 500
Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
ranks companies by revenue. This method is heavily biased towards distributors such as Walmart, which may have a high volume of sales but may be operating on very thin profit margin
Profit margin
Profit margin, net margin, net profit margin or net profit ratio all refer to a measure of profitability. It is calculated by finding the net profit as a percentage of the revenue.Net profit Margin = x100...
s.
Another method might be to look at the market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
of the company. However, this price is dictated by the perceived value of the company and its prospects. Thus, in the late nineties, Cisco Systems
Cisco Systems
Cisco Systems, Inc. is an American multinational corporation headquartered in San Jose, California, United States, that designs and sells consumer electronics, networking, voice, and communications technology and services. Cisco has more than 70,000 employees and annual revenue of US$...
would have been the biggest company by this measure. When the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
crashed, Cisco's perceived value changed dramatically.
See also
- Forbes Global 2000Forbes Global 2000The Forbes Global 2000 is an annual ranking of the top 2000 public companies in the world by Forbes magazine. The ranking is based on a mix of four metrics: sales, profit, assets and market value...
- Fortune 500Fortune 500The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
- List of companies by revenue
- List of corporations by market capitalization