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June 24, 2011 10:15 pm
This is the 15th ranking of the FT Global 500, providing an annual snapshot of the world’s largest companies. Exxon Mobil resumes its position as the world’s most valuable company and PetroChina is number two. The total market capitalisation of the Global 500 companies has risen by 12 per cent from $23,500bn to $26,200bn. The FTSE All World index has risen by 12 per cent over the same period in dollar terms. The 500th company is worth $19bn, compared with $16bn last year. Banks and oil companies remain the most valuable sectors in the list at $4,436bn and $3,836bn respectively. Mining increases its position from ninth to fifth, with its market value on the list rising by 4.1 per cent to $1,067bn.
The FT Global 500 table, and many others derived from the same data, show how fortunes have changed in the past year, highlighting relative performance of countries and sectors.
The companies are ranked by market capitalisation – the greater the stock market value of a company, the higher its ranking. Market capitalisation is the share price on March 31 2011 multiplied by the number of shares issued. The figures were converted into a common currency to allow comparison so all the figures in the main FT 500 ranking are presented in terms of the dollar at that date.
We have included all companies where the free float – the proportion of shares in market circulation – is at least 15 per cent. Companies are then valued on the lines of shares that are quoted on the stock market. The full value of a listed stock is included even if part of it is tightly held. Unlisted lines of stock are excluded. Investment companies are not included.
A company’s country allocation in the FT 500 is based on incorporation and stock market listing, along with market perception, largely following the FTSE guidelines. This can lead to what may seem like some anomalies. For example, EADS and STMicroelectronics, both incorporated in the Netherlands, are classified as French as the main quotes are on the Euronext Paris exchange. Schlumberger and Seagate Technology are classified as US, although they are incorporated in the Netherlands Antilles and the Cayman Islands respectively. The Jardine companies appear under Hong Kong despite their Singapore listings and incorporations in Bermuda.
The main Global 500 table shows for each company: the rank in 2010 and 2011, the country, market capitalisation, sector, turnover, net income, total assets and employees. Also included are the price, price earnings ratio, dividend yield and the company’s year end.
Companies can be ranked by any of their key statistics such as turnover (as used by Fortune magazine in its Global 500), employment or profits. While each can be interesting, we feel there are more weaknesses with these methods. Turnover, for example, does not adequately allow for banks and some financial services companies, while profits will be distorted by write-offs. A common problem affecting most methods other than market capitalisation is timing. As profit and turnover figures come from annual reports, any ranking based on them must be out of date. As annual reports are staggered through the year some of the numbers used for the rankings would relate to a period two years before publication of the ranking.
The risers and fallers in our annual list of the world’s biggest companies
In contrast it can also be argued that a ranking based on market capitalisations contains a forward-looking element in the sense that share prices include a view on investors’ expectations.
There are additional FT 500 tables for Europe, US, UK and Japan. There are also tables showing the newcomers to the list (and those who have disappeared), largest rises and falls in rank, market capitalisation by sector and by country as well as a list ranking all the Global 500 companies within their sectors.
The FT 500 companies can be followed in the newspaper and on FT.com. A table listing all the FT 500 companies appears daily in the UK edition of the paper (and on Mondays in the international editions) and in the data archive on FT.com. Through the week the FT 500 companies are identified on the international editions’ stock listing pages by a Maltese cross symbol. The constituents of that list are updated quarterly with successive updates shown at www.ft.com/ft500.
N/R = not relevant. Data queries to firstname.lastname@example.org . Data from Thomson ONE Banker, Thomson Reuters Datastream and individual companies. Compiled by Anne-Britt Dullforce
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