Methodology for Fortune 500
Definitions and explanations
Methodology
Companies are ranked by total revenues for their respective fiscal years. Included in the survey are companies that are incorporated in the U.S., operate in the U.S., and file financial statements with a government agency. This includes private companies and cooperatives that file a 10-K or a comparable financial statement with a government agency, and mutual insurance companies that file with state regulators. It also includes companies that file with a government agency but are owned by private companies, domestic or foreign, that do not file such financial statements. Excluded are private companies not filing with a government agency; companies incorporated outside the U.S.; and U.S. companies consolidated by other companies, domestic or foreign, that file with a government agency. Also excluded are companies that failed to report full financial statements for at least three-quarters of the current fiscal year. Percent change calculations for revenue, net income, and earnings per share are based on data as originally reported. They are not restated for mergers, acquisitions, or accounting changes. The only changes to the prior years’ data are for significant restatement owing to reporting errors that require a company to file an amended 10-K.
Revenues
Revenues are as reported, including revenues from discontinued operations when published. If a spin-off is on the list, it has not been included in discontinued operations. Revenues for commercial banks includes interest and noninterest revenues. Revenues for insurance companies include premium and annuity income, investment income, and capital gains or losses, but exclude deposits. Revenue figures for all companies include consolidated subsidiaries and exclude excise taxes. Data shown are for the fiscal year ended on or before Jan. 31, 2023. Unless otherwise noted, all figures are for the year ended Dec. 31, 2022.
Profits
Profits are shown after taxes, extraordinary credits or charges, cumulative effects of accounting changes, and noncontrolling interests (including subsidiary preferred dividends), but before preferred dividends of the company. Figures in parentheses indicate a loss. Profit declines of more than 100% reflect swings from 2021 profits to 2022 losses. Profits for real estate investment trusts, partnerships, and cooperatives are reported but are not comparable with those of the other companies on the list because they are not taxed on a comparable basis. Profits for mutual insurance companies are based on statutory accounting.
Balance sheet
Assets are the company’s year-end total. Total stockholders’ equity is the sum of all capital stock, paid-in capital, and retained earnings at the company’s year-end. Excluded is equity attributable to noncontrolling interests. Also excluded is redeemable preferred stock whose redemption is either mandatory or outside the company’s control. Dividends paid on such stock have been subtracted from the profit figures used in calculating return on equity.
Employees
The figure shown is a fiscal year-end number as published by the company in its annual report. Where the breakdown between full- and part-time employees is supplied, a part-time employee is counted as one-half of a full-time employee.
Earnings per share
The figure shown for each company is the diluted earnings-per-share figure that appears on the income statement. Per-share earnings are adjusted for stock splits and stock dividends. Though earnings-per-share numbers are not marked by footnotes, if a company’s profits are footnoted it can be assumed that earnings per share is affected as well. The five-year and 10-year earnings-growth rates are the annual rates, compounded.
Total return to investors
Total return to investors includes both price appreciation and dividend yield to an investor in the company’s stock. The figures shown assume sales at the end of 2022 of stock owned at the end of 2012, 2017, and 2021. It has been assumed that any proceeds from cash dividends and stock received in spin-offs were reinvested when they were paid. Returns are adjusted for stock splits, stock dividends, recapitalizations, and corporate reorganizations as they occurred; however, no effort has been made to reflect the cost of brokerage commissions or of taxes. Total-return percentages shown are the returns received by the hypothetical investor described above. The five-year and 10-year returns are the annual rates, compounded.
Medians
No attempt has been made to calculate median figures in the tables for groups of fewer than four companies. The medians for profit changes from 2021 to 2022 do not include companies that lost money in 2021 or lost money in both 2021 and 2022, because no meaningful percentage changes can be calculated in such cases.
Credits
This Fortune 500 Directory was prepared under the direction of list editor Scott DeCarlo. Income statement and balance sheet data provided by the companies were reviewed and verified against published earnings releases, 10-K filings, and annual reports by accounting specialist Rhona Altschuler. Markets editor Kathleen Smyth used those same sources to check the data for earnings per share. In addition, we used data provided by Refinitiv (an LSEG business) and S&P Global Market Intelligence to calculate total return and market capitalization. The data verification process was aided substantially by information provided by S&P Global Market Intelligence.