About Fortune 500 companies
There are a lot of successful companies in the world and there was no parameter on which the success rate can be measured. Therefore in 1955, a magazine called Fortune decided to create such a parameter for the US companies. This idea was highly appreciated by the US companies and Fortune 500 came into existence. It was published in 1955, for the first time and prints the yearly list of 500 companies of the United States according to the ranking of generated revenue for the previous fiscal year. The first 10 companies that were in the top 10 of the list in 1955 are General Motors, Armour, Mobil, Gulf OIL, U.S.Steel, DuPont, General Electric, Chrysler, Esmark, and General Motors.
This list is created by compiling the recent revenue figures for both private and public companies whose revenue data are publicly available. It is a matter of great honor for companies to be on that list.
The survey for Fortune 500 companies accommodates companies that operate and are incorporated in the United States and their financial statements are filed with government agencies that are both, privately held and publicly traded. It excludes foreign corporations, private companies that do not file a financial statement with government agencies, companies that fails to fully report their financial statements and US companies merged with other companies.
However, from the Year 2019 onwards companies ranking will depend on their total revenues for respective financial years as documented by 10-K filings. The list has shown the coming and going of more than 1800 American Companies over the years. All those names that were once prized for their revenue generation dramatically became fodder for acquisitions, mergers, bankruptcies, and shifts in the output of the production. One by one those suffering companies came off the list. Especially recession had badly impacted the individual status of many companies. With the Fortune 500 list, the economic status of the country can also be deduced as well as, how far the economic recovery has been done since the recession.
Background of Fortune 500
Edgar P. Smith came up with this brilliant idea for the list. He was assistant to the managing editor of the Fortune magazine. The list initially focused on the companies that dealt with the manufacture, energy sectors, mining and big-name companies like General Motors, who was top on the list in 1955 with the yearly revenue of $9.8 billion. The big change came in 1994 when along with the manufacturing, energy sectors and mining companies’ service companies were also included for the first time to create a list.
This proved to be a turning point for the Fortune 500 list as 291 of the 500 entries on that list belongs to the service companies in 1994. Among the top 10 were the three newly added service companies namely Wal-Mart, AT&T, and Sears Roebuck & Co. Of those Wal-Marts has held number 1 position for several years, which would have not been possible if the Fortune 500 hadn’t changed.
Which companies hold the Bragging rights for being on the list?
General Motors holds the right to brag Mostly as it has been on the list since it was created. However, its position keeps changing over the years. In 2018 it was found in the 10th position with a revenue of $157.3 billion. On the same list, Wal-mart topped it with the revenue of $500.3 billion followed by ExxonMobil with the revenue of $244 billion and Berkshire held the place three only loosing with ExxonMobil by 2 million. The companies on the Fortune 500 list are the two-third of the U.S GDP generating Companies with the $21.6 trillion in market value, $1 trillion in profits and 12.8 trillion in revenues. As far is bragging is concerned Tesla deserves accolades too for jumping to 123 ranks from 260 on the list.
Over time Fortune 500 has also become a magazine that identifies the biggest employers, biggest jumps, and newcomers. It also throws light on the market growth in jobs, founders as CEOs and Female CEOs, etc.
What is meant by UHNWI?
Ans. UHNWI is an abbreviation for Ultra-High Net-Worth Individuals that defines people who have the company’s assets worth $30 million excluding personal assets. These UHNWI constitutes approximately 0.03% of the total World Population yet hold approximately 13% of the total World’s wealth. According to the 2018 Forbes Lists of World’s Richest People Jeff Bezos, CEO of Amazon.com resigns as the world’s richest person. Bill Gates, Warren Buffet, Mark Zuckerberg and Carlos Slim Helu respectively followed behind. David and Charles Koch, Micheal Bloomberg also a former Mayor of New York City and in-laws and children of Sam Walton, etc are other few who are near the top of the UHNWI population.
What is Wal-Mart’s history with Fortune 500?
Wal-Mart is one of the few companies in the Fortune 500 list that has graced it 24 times since 1994 where it held the 4th position as a newcomer. Since then it has been awarded first position a dozen times or more. For the past 6 years, it has held and maintained the first position and this year’s revenue was recorded to be 500.3 billion.
Sam Walton the founder of Wal-Mart started with the vision to reach and provide to the rural areas with low price and good quality. The first store of Wal-Mart was inaugurated in Arkansas in 1962. This company rapidly grew and in 1970 went public. Shareholders of that time observed the marked growth in their wealth and the era was termed as “Age of Walmart” by a CNBC reporter.
Although Walton retired in 1988 from the post of CEO and left the running of the company in the efficient hands of Lee Scott, David Glass, Michael Doug and Doug McMillon who is also the current CEO. Although Sam Walton has a big happy family his dream company is not run by any of his family members.