Article source 15 Facts To Help You Interpret The Fortune 500 By Drivewealth.com
We frequently hear the name “Fortune 500” when discussing large companies and their CEOs, but many people don’t really understand the Fortune 500 or the significance of the companies listed. We have compiled a list of helpful facts about the Fortune 500 to help you think about the list in relation to your investments.
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1. First and most importantly, the most recent Fortune 500 list can be found here.
2. It is an annual list of the largest companies in the United States with regard to each company’s most recent total revenue and profit figures.
3. Fortune Magazine has compiled this list every year since its first list in 1995.
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4. Companies on the list now have revenue equivalent to two-thirds of the U.S. GDP. This means that these 500 companies bring in double the revenue of the other nearly 6 million American companies combined.
5. To be exact, the listed 500 companies recorded a total of $12 trillion in revenue and $840 billion in profits in 2015.
6. This can be compared to the 1995 numbers, where the revenue of the Fortune 500 companies equaled only 4% of the U.S. GDP. Basically, we have seen a huge growth of America’s largest 500 companies in the past two decades.
7. If we’re talking about huge growth, we should also note that the Fortune 500 companies now employ 27.9 million people worldwide. If you need a reference, that’s like employing the entire population of Portugal, Sweden, and Switzerland…..at the same time!
8. And, while the title “Fortune 500 Company” is highly coveted, being the CEO of a Fortune 500 company is equally spotlight-worthy. The CEOs of Fortune 500 companies are often looked to for business strategy and advice.
9. In interviews about their companies last year, Fortune 500 CEOs were asked: “what is your company’s greatest challenge?” The most frequent answer was “technological change.” This shows the importance of technological innovation to even the most successful of companies.
10. However, it seems those challenges were manifested, as total revenue for Fortune 500 companies was down 4.2% compared to previous years.
11. Even worse, aggregate profit was down 11%.
12. Year by year comparisons like these may be important, too. Many people believe that the Fortune 500 encompasses so much national revenue – equal to two-thirds of the U.S. GDP – that it is a good representation of the American economy.
13. Likewise, we can get a lot of insight about specific companies by looking at their shifts on the Fortune 500 list over time.
14. For example, Wal-Mart claimed the #1 position on the list for the fourth consecutive year. Facebook shifted up 85 spots this year and Amazon broke into the top 20 for the first time ever.
15. At the most basic level, being aware of the Fortune 500 can help investors evaluate some of the largest publicly traded companies in America.
If you haven’t seen this year’s Fortune 500 list, take a look. Each year, the list changes. In fact, only 12% of the companies that were listed on the first ever Fortune 500 list in 1955 are still present on the list today. So, the Fortune 500 list can be both a tool for evaluating the successes of industries over time or a snapshot of how some of America’s largest companies are performing today. Either way, becoming familiar with the list might help you to make more informed investing decisions.