Its sales growth, assets, earnings, capitalization and shareholder equity determine a Fortune 500 company’s net worth. These factors determine if the company is growing and can maintain its status on the Fortune list.Continue Reading
When a company's sales increase on a steady incline every year, the company is growing and has established a growth pattern that attracts investors. Companies that make the Fortune 500 list usually have sales that outperform the economy in which the company operates. Projected sales based on this growth play a role in determining the net worth of the company.
Assets are items of economic value owned by a company or corporation. These include cash, securities, accounts receivable, inventory and property ownership. Subtracting the cost of sales, operating expenses and taxes from a company’s revenue determines its earnings. These components are important to the accurate valuation of a company's stock price and net worth.
Capitalization, or invested capital, is the total of the company's long-term debt, stock and retained earnings. A company’s invested capital has a definite effect on the market price for the company's shares and is useful for calculating net worth. When all of these factors are measured and a net worth is determined, it must meet the revenue threshold of a Fortune 500 company. As of 2014, this threshold is around $5 billion.Learn more about Ethics