Explaining Forbes Global 2000 analysis

While attempting to criticize and highlight limitations

Forbes Global 2000 is an annual ranking of the world’s biggest public companies along 4 major verticals: sales, profits, assets, market value. Forbes ranking is regarded to be one of the most popular company rankings and the findings from her yearly analysis is largely accepted ‘hook, line and sinker’ without really understanding or questioning her methods. With this post, I set out to look at their methodology, data gathering process, data analysis and findings then I conclude by suggesting some limitations to this approach. In a later post I look to draw insights from their analysis.


In carrying out this work, Forbes sets cut-off points for each of the four metrics where companies must meet at least one of the cut-offs to make the (final) Global 2000 list for that year. By doing so, they end up creating four separate lists: Sales 2000, Profits 2000, Assets 2000, Market Value 2000. So, it is possible for a company to meet the cut-off for Sales and not meet the cut-off for Profits but will still make the initial list because it met one of the metrics cut-off. The cut-off values per metric are set yearly (that is they are adjusted from year to year). For instance, the cut-off for Sales metric this year is $3.95 billion as opposed to the $4.9 billion of 2016. While for Profits the cut-off is $257.0 million which is higher by $10 million from last year. Assets and market value cut-offs are $9.34 billion and $5.65 billion respectively. These adjustments could reveal the systemic (synonym: general) performance of the industry for a given period (in this case, yearly).

Data Collection/gathering

They get their data from FactSet Research systems (FRS), a multinational financial data and software company headquartered in Norwalk, Connecticut (CT), the United States that provides financial information and analytic software for investment professionals. The claim to quality-check the data from the FRS with other sources such as Bloomberg and the company’s financial statement which can usually be found in the latter part of the company’s annual reports.

Note: Public companies are usually mandated by law to publish annual reports, a publication which describes their operations and financial conditions to shareholders. It is usually very easy to access even by non-shareholders just any member of the public.

Data Analysis

After companies have been added to the final Forbes 2000 list, which is a consolidation of the four lists generated from each of the outlined metrics, Forbes then adds all the values together and ranks the companies based on the total value which they call a ‘composite score’.


However, there are several (known and often accepted) limitations to this approach. For instance, its restriction to only public companies. Still, there are some that are not very much talked about such as: selection of metrics, data source method of aggregating data, and the use of a composite score which doesn’t take into account the possibility of a difference in intensity of the different metrics. Rather, it is a simple addition of the values from all the metrics per company which is then ranked from highest to lowest value.

Source: Benjamin Dada
Largest value→least share (aka position in a vertical)

Further explanation of the limitations suggested above

  • Change to the metrics (either in terms of number or cut-off point) will yield a different result.
  • Data source might also be introducing noise to the system where the method of even collecting their own data needs to be questioned.
  • Need to introduce weighting for the metrics. Some might argue that profit should not be a measure as important as asset and market value when determining company size. Others might argue otherwise. An example of a common weighted scale is the derivation of Grade Point Averages at Universities.

See Forbes Global 2000 full listing and her methodology