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The Guardian: The question: Which are the world’s most profitable firms?

By: JULIA FINCH, The Guardian – United Kingdom
Published: Jul 31, 2006

Exxonmobil, BP, Royal Dutch Shell, Chevron, ConocoPhillips and Total – collectively they have always been known as Big Oil. But the recent rise in the oil price to around $74 a barrel has made them a whole lot Bigger.

Exxonmobil – the world’s biggest company – has just became the first ever firm to unveil sales of more than $1bn a day. That is pounds 540m every 24 hours. Or pounds 6,250 a second. Every second. Exxon, based in Irving, Texas (where else?), was reporting sales up more than 12% to $99bn and profits up 36% to more than $10bn – and that was just for three months. That probably ensures it will once again top the global corporate rankings when the numbers are totted up at the end of this financial year.

The world’s megacorps are neatly summarised in the Fortune 500 – an annual ranking by the US business magazine. This year’s list shows Exxon sitting on top of the pile, having ousted Wal-Mart. Exxon’s sales, at $340bn last year – slightly more than the national income of Sweden – came in at $25bn more than Wal-Mart.

With their sales powered by globalisation and economic growth in countries such as India and China, five of the world’s top 10 companies are now oil majors. Four more are car makers.

But sales do not always equal profits. Take General Motors, the world’s fifth- biggest corporation and the biggest car company. Last year it raked in revenues of $192bn – and made a humungous loss of $10.6bn. And several of the biggest profit earners are outside the biggest sellers. Citigroup, the world’s largest bank, chalks up the third biggest profits, but is ranked only 14th in the Fortune 500. Bank of America and the UK’s HSBC are also in the top 10 profit earners, but are 37th and 26th on revenue.

But maybe a better measure of profitability is not the biggest numbers, but the highest profits compared to revenue. The top echelons in this ranking are reserved for names such as Coca-Cola, Intel and Microsoft. But perched on top, head and shoulders above its peers, is a company that produces more than pounds 40 of profits for every pounds 100 of revenue. Let’s hear it for the UK’s National Grid.

Julia Finch

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