How do the biggest American companies make money?


how do companies make money

Every year, Fortune magazine compiles their Fortune 500 list of American companies. This list ranks 500 public and private American companies in terms of yearly revenue, or the money they earn from selling goods and services in a single year. They determine the revenue through documents provided to the public and interviews with key company officials about their revenue streams.

It’s safe to say that earning a position on the Fortune 500 is a pretty impressive feat. The companies on each yearly list make hundreds of millions, if not billions of dollars in a single year. What they do with that money and how it accounts for their profit is unique to each company. Yet the Fortune 500 is sort of like a list of the wealthiest people alive — only replace those people with corporations.

Today, Fortunate announced the top 10 earning companies on the Fortune 500. These American brands are well known throughout the world and brought it a minimum $150 billion in revenue during their 2016 financial year. Best of all, these 10 companies are all publicly traded, which means you can invest in them, too.

Before you invest in any of these companies, you should probably know what they make and how they bring in ungodly amounts of money. Fortunately, we took the liberty to examine each company in the Fortune Top 10 and see what makes them so much cash.

10. Ford Motorford

Ford ($F) is one of the biggest American care manufacturers in the world. Though they make cars in the states, they export their vehicles to countless other countries, which earned them $151.8 billion in revenue during 2016.


9. AT&TAT&T

AT&T ($T) isn’t just a mobile phone company. They provide home internet, home television (you know, like a cable service), and even satellite television through DirecTV. They had enough customers across the country last year to generate $163.79 billion in revenue. That’s a lot of phone calls!

8. General MotorsGeneral Motors

Like Ford, General Motors ($GM) makes cars. Their GMC, Cadillac, Chevrolet, and Buick brands sell millions of vehicles across the world in a variety of body and kit types, styles, and configurations. Last year, this earned them $166.38 billion, which isn’t bad for a once-struggling car company.

7. CVS HealthCVS

CVS ($CVS) is the biggest pharmacy and health care chain around. Millions of people nationwide use the company’s thousands of locations to fill prescriptions, buy necessary health items, and shop for other products. Perhaps that’s why the company raked in $177.26 billion in revenue last year.

6. UnitedHealth GroupUnitedHealth Group

UnitedHealth Group ($UNH) is an insurance company. Though they offer other products and services, they mostly make money from insurance premiums and payments. They made $184.84 billion in revenue last year, making them one of the leading insurance providers in the United States.

5. McKessonMcKesson

McKesson ($MCK) sells drugs. Legal ones, of course. They make pharmaceutical products, health care devices, and many other items necessary for hospitals, doctors, and patients. Their offerings helped them bring in $192.49 billion in revenue last year.

4. ExxonMobilExxonMobil

ExxonMobil ($XOM) is the biggest gas company in the world. They sell fuel and petroleum-based products, and make $205 billion last year doing so. (Thanks to a recent shareholders meeting, they might be selling something else in the near future.)

3. AppleApple

Apple ($AAPL) sells smart phones (iPhones), tablets (iPads), computers (MacBooks and iMacs), and devices to go along with their products. They sold enough iStuff last year to make $215.64 billion. To put it into perspective, they rake in more revenue than ExxonMobil, an oil company.

2. Berkshire HathawayBerkshire Hathaway

As a holding company, Warren Buffet’s Berkshire Hathaway ($BRK.A and $BRK.B) owns many other companies, from Geico to Fruit of the Loom. Each company Berkshire Hathaway owns operates different, though they all bring in revenue. This revenue added up to a whopping $223.6 billion during the company’s last financial year.

1. WalmartWalmart

Walmart ($WMT) might not be as popular on the stock market as Amazon ($AMZN), but they sure sell a lot. Last year, they sold $485.87 billion worth of products and service. That’s nearly half a trillion (with a T) in sales!

Should you invest in these companies?

These companies made hundreds of billions in revenue last year, but revenue is different from profit. Profit determines how much money they had left after paying for costs of business, goods, overhead, and everything else required to run a business. These companies are some of the biggest in the world by revenue, their respective profits couldn’t be more different.

If you’re interested in investing in any of these stocks, be sure to do your research on each company’s profit, history, earnings, and other important figures. If you invest based on revenue alone, you’re going to have a bad time.


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