What Is the Fortune 500?
Key takeaways
– The Fortune 500 is an annual ranking—published by Fortune magazine—of the 500 U.S. companies with the largest total revenues for their most recent fiscal year.
– Eligibility requires a for‑profit company incorporated and operating in the United States that files financial statements with a U.S. government agency; public and qualifying private companies can be included.
– The list is revenue‑based (not profitability), and inclusion is widely regarded as a mark of scale and prestige.
– The list has evolved since its 1955 origin (initially limited to manufacturing/mining/energy); a 1995 change added service sectors and dramatically reshaped the list.
– For 2024, Walmart ranked #1 (about $648 billion in revenue), followed by Amazon and Apple; Apple, Berkshire Hathaway and Alphabet were the most profitable on the 2024 list.
Understanding the Fortune 500
– What it measures: total revenues reported for a company’s most recent fiscal year (as shown in 10‑K filings or comparable financials).
– Who is counted: U.S.-based, for‑profit companies that file financial statements with U.S. government agencies. Both publicly traded and privately held companies that meet reporting requirements may be included.
– Who is excluded: foreign corporations, strictly private companies that do not file public financials, subsidiaries that are consolidated into a parent company, and firms that fail to report sufficient financial information (for example, less than three quarters of fiscal reporting).
Fortune 500 methodology (high level)
1. Start with U.S.-incorporated, for‑profit companies that submit financial statements to U.S. agencies.
2. Use reported revenues for the company’s most recent fiscal year.
3. Rank the 500 companies with the highest revenues (highest revenue = #1).
4. Apply exclusions (foreign companies, insufficient reporting, consolidated subsidiaries, etc.).
Why revenue (not profits)?
– The list is expressly a size ranking by revenue. Profitability is a different metric and not the basis for the Fortune 500 ranking—so high revenue does not always equal high profit margins or shareholder returns.
Fortune 500: practical steps for companies that want to qualify
If your organization aims to be on the Fortune 500, the list below summarizes realistic areas of focus. Note: inclusion is driven primarily by absolute revenue scale; there is no short path.
1. Be a U.S.-incorporated, for‑profit company
– Organize/retain a primary corporate structure in the United States and operate substantial U.S. business.
2. Grow revenue at scale
– Prioritize scalable customer acquisition, large market penetration, diversification of revenue streams, and M&A when strategic.
– Target industries and business models that can produce very high revenue (retail/wholesale, energy, tech platforms, financial services, health insurers, telecom, etc.).
3. Maintain complete, timely, and public financial reporting
– Public companies already file 10‑K/10‑Q with the SEC. Privately held companies must still provide comparable financial statements to qualify; lack of public reporting disqualifies many large private firms.
– Ensure your financials are audited, accurate, and transparent.
4. Expand and consolidate where appropriate
– Geographic expansion, product diversification, and strategic acquisitions can accelerate revenue growth and scale.
5. Choose an appropriate fiscal year and book revenues properly
– Because ranking uses the most recent fiscal year’s revenue, timing of acquisitions, divestitures, and recognition policies can influence which year’s revenue is counted.
6. Meet reporting thresholds
– Avoid gaps in reporting (Fortune requires sufficient disclosure—companies that fail to report at least three quarters of the fiscal year may be excluded).
Practical steps for investors who want exposure to Fortune 500 companies
1. Consider broad index funds (many Fortune 500 companies are also in the S&P 500).
– Buying an S&P 500 index fund gives exposure to a large number of high‑revenue U.S. companies.
2. Use sector or thematic ETFs if you prefer concentrated exposure
– If you want retail or tech leaders specifically, look for sector ETFs or actively managed funds focused on those areas.
3. Research fundamentals—not just Fortune 500 status
– Fortune 500 membership signals scale but not necessarily good margins, strong balance sheets, or growth prospects. Check profitability, cash flow, leverage, and valuation.
4. For dividend or income goals, screen for payout history and sustainability
– High revenue alone does not guarantee dividends; evaluate free cash flow coverage.
A brief history and major changes
– Origin (1955): Created by Edgar P. Smith at Fortune to measure the size and power of American companies. The original list was the Fortune Industrial 500 and included only manufacturing, mining and energy firms.
– 1995 change: Fortune combined all sectors into a single list (service companies were included for the first time). That reform had a major impact—service and retail companies quickly rose in prominence and reshaped the top ranks (Walmart benefitted significantly).
– Evolution since 1955: Over 2,200 American companies have appeared on the Fortune 500 at some point. Companies move on and off the list due to M&A, bankruptcies, changing demand, and macroeconomic cycles.
The “49” that never left (since 1955)
– Forty‑nine companies have appeared on every Fortune 500 list since 1955. That continuity reflects long‑standing scale and resilience in certain sectors (Fortune published a list and commentary about these companies). (See Fortune’s list for details.)
Fortune 500: 2024 snapshot
– #1: Walmart — approximately $648 billion in revenue (12th consecutive year at #1).
– #2: Amazon — approximately $575 billion.
– #3: Apple — approximately $383 billion.
– #4: UnitedHealth Group; #5: Berkshire Hathaway.
– Most profitable (2024): Apple, Berkshire Hathaway, Alphabet.
– New entrants in 2024: 14 companies made the list for the first time, including DoorDash, First Citizens BancShares, and Monster Beverage.
Who is 1 on the Fortune 500?
– For 2024, Walmart holds the #1 spot, the largest U.S. company by revenue for the 12th straight year.
What makes you a Fortune 500 company?
– Criteria summary:
– Be a U.S.-based, for‑profit company that files financial statements with a U.S. government agency.
– Report sufficient and public financials (audited or comparable disclosures).
– Rank among the top 500 U.S. companies by total revenue for the most recent fiscal year.
Is being on the Fortune 500 a big deal?
– Yes—reasons:
– Prestige and recognition: inclusion is a widely recognized symbol of scale and market reach.
– Talent and business benefits: it can help attract employees, customers, partners, and investors.
– Sign of size, not necessarily efficiency: the list measures revenue, not profitability, management quality, or future prospects.
– Economic signal: shifts on the list can indicate broader economic changes (sectoral shifts, impacts of recessions, etc.).
The bottom line
– The Fortune 500 is the definitive, annual revenue ranking of the largest U.S. companies. It is a useful snapshot of corporate scale and changing industry prominence, but it is only one lens—investors, employees, and business partners should combine it with profitability, cash flow, strategic positioning, and governance measures for a fuller view.
Sources and further reading
– Investopedia: “What Is the Fortune 500?” (Michela Buttignol) — overview and definitions.
– Fortune magazine: “Methodology for Fortune 500”; Fortune’s historical pieces on the list and the 49 companies that have appeared every year.
– Fortune: 2024 Fortune 500 coverage (rankings and company notes).
– CNN/Fortune: historical reporting on the 1955 and 1995 lists.
If you’d like, I can:
– Produce a checklist tailored to your company to assess Fortune 500 eligibility,
– Build a step‑by‑step multi‑year revenue growth plan outline,
– Or assemble a list of the Fortune 500 companies in a particular sector (retail, tech, healthcare) for investor or competitive research. Which would you prefer?