What Does Fortune 500 Mean?

by Charlie Gaston - Updated September 26, 2017
What Does Fortune 500 Mean?

The Fortune 500 list is synonymous with great capital gain, significant revenue and expansion. Although these achievements are the benchmark of a typical Fortune 500 company, they are not the only factors. Many companies benefit from advances in new technologies, effective marketing campaigns and strong upper management to find success as a business, and eventually land on the list.

Identification

Fortune 500 is a title used to describe the 500 companies that are listed by Fortune magazine for having earned the most after-tax revenue for the year; among public companies.

Formula

Each honoree is evaluated based on the gross revenue collected after all tax liabilities have been satisfied. Fortune magazine uses a formula to confirm gross revenue that does not include pretax dollars.

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Past Fortune 500 Companies

Past Fortune 500 companies have included Wal-Mart, Exxon Mobile, Hewlett-Packard, Microsoft and JP Morgan & Chase.

Time Frame

The Fortune 500 list is created yearly and businesses are added and dropped each year. A business must cite the year it was listed as a Fortune 500 company along with the gross revenue for that period to use the title.

Potential

Generally, to be a Fortune 500 company revenue should reach the billion-dollar mark. Common returning entrants are large multinational corporations with holdings around the world.

About the Author

Charlie Gaston has written numerous instructional articles on topics ranging from business to communications and estate planning. Gaston holds a bachelor's degree in international business and a master's degree in communications. She is fluent in Spanish and has extensive travel experience.

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