US Top-3000 Companies Revenues and Profits Analysis 2016 – Top 10 Insights

We recently updated our financial database of all the public companies in the United States with their 2016 revenues and profits. A subset of the database, which we call R&P Screener, provides information on the revenues, net profits, revenue growth, net profit growth, and net profit margin for the top 3000 companies in the US. It also provides information such as company address, phone, website URL, SIC code, sector, and industry.

The top 3000 companies in the US generated a total of $14.49 trillion revenues and $1.03 trillion of net income during 2016. Here are some insights from the R&P Screener that we would like to share with you.

Insight 1. The Pareto principle (80/20 Rule) applies to the US top 3000 companies revenues and profits

As per the Pareto principle, roughly 80% of the effects come from 20% of the causes. For example, 20% of products or customers may contribute to 80% of a company revenues. or 80% of  the complaints may come from 20% of the customers. It doesn’t always have to be 80/20. It can be 85/15 or 90/10 as well. However, it is important to have a realization of this principle because it can help people in their prioritization efforts.

We observed Pareto principle in the US top 3000 companies revenues and profits as well. The top 20% of the companies (top 600 of 3000) generated 84.6% of the total revenues during 2016 ($12.26 trillion of $14.49 trillion). The same top 20% of the companies generated 88.8% of the total net profits ($915 billion of $1,031 billion).

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Insight 2. The revenues are concentrated in the mega corporations

We categorize the companies into the following four categories based upon their revenues: Mega (revenues greater than $50 billion), Very Large (revenues between $10 and $50 billion), Large (revenues between $1 and $10 billion), and Medium (revenues between $50 million and $1 billion).

There were 54 mega corporations in the top 3000 companies in the US during 2016. Those 54 mega companies combined revenues during 2016 were $5.76 trillion. This represents a share of 39.7% in the total revenues of $14.49 trillion of the 3000 companies. There were 1610 medium-size companies & their combined revenues during 2016 were $594 billion.

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Insight 3. The profits are concentrated in the mega corporations

Just like the revenues, the profits are also concentrated in the mega corporations. The 54 mega corporations had a combined net income of $422 billion during 2016. This represents a share of 40.9% in the total net income of $1.03 trillion of the 3000 companies. On the other hand, 1610 medium-size companies combined net income during 2016 was just $23 billion.

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Insight 4. Three-fourth of the companies had a positive net income during 2016

We categorize the companies into the following six categories based upon their net income: Large Profits (net income greater than $500 million), Medium Profits (net income between $50 and $500 million), Small Profits (net income between $0 and $50 million), Small Losses (net income between -$50 million and $0 million), Medium Losses (net income between -$500 million and -$50 million), and Large Losses (net income less than -$500 million)

There were 2244 companies (74.8% of the total) with positive net income and 756 companies (25.2% of the total) with negative net income during 2016.

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Insight 5. Two-third of the companies had a positive revenue growth during 2016

We categorize the companies into the following eight categories based upon their annual revenue growth: Very High +ve (growth greater than 50%), High +ve (growth between 20% and 50%), Medium +ve (growth between 5% and 20%), Low +ve (growth between 0% and 5%), Low -ve (growth between -5% and 0%), Medium -ve (growth between -20% and -5%), High -ve (growth between -50% and -20%), and Very High -ve (growth less than -50%)

There were 1985 companies (66.2% of the total) with a positive revenue growth and 1015 companies (33.8% of the total) with a negative revenue growth during 2015-16.

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Insight 6. One-fourth of the companies had a negative net income growth during 2016

We categorize the companies into the following nine categories based upon their net income growth: Very High +ve (growth greater than 50%), High +ve (growth between 20% and 50%), Medium +ve (growth between 5% and 20%), Low +ve (growth between 0% and 5%), Low -ve (growth between -5% and 0%), Medium -ve (growth between -20% and -5%), High -ve (growth between -50% and -20%), Very High -ve (growth less than -50%), Not Computed (Net Income zero or -ve in 2015 or -ve in 2016)

There were 1236 companies (41.2% of the total) with a positive net income growth and 800 companies (26.7% of the total) with a negative net income growth during 2015-16. For 964 companies (32.1% of the total), we could not compute net income growth because their net income was negative during 2015 or 2016.

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Insight 7. One-fourth of the companies had negative net profit margin during 2016

We categorize the companies into the following eight categories based upon their net profit margin: Very High +ve (margin greater than 50%), High +ve (margin between 20% and 50%), Medium +ve (margin between 5% and 20%), Low +ve (margin between 0% and 5%), Low -ve (margin between -5% and 0%), Medium -ve (margin between -20% and -5%), High -ve (margin between -50% and -20%), and Very High -ve (margin less than -50%)

There were 2244 companies (74.8% of the total) with positive net profit margin and 754 companies (25.2% of the total) with negative net profit margin in 2016.

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Insight 8. Headquarters of 44% companies are located in the top five states

California, Texas, New York, Illinois, and Massachusetts are the top five states in terms of number of companies with headquarters locations. A total of 1309 companies (43.6% of the total) have headquarters in these states. The combined revenues of these companies was $5.96 trillion (41.1% of the total) during 2016.

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Insight 9. Healthcare sector group had the highest revenue growth

We categorize the companies into seven sector groups: Financials; Industrials; Retail, Consumer Goods, Restaurants; Energy & Utilities, Basic Materials; Technology; Healthcare; Telecom, Media & Entertainment, Travel & Leisure. These seven sector groups comprise of 23 sectors and 92 industries.

Of all the sector groups, Healthcare sector group was the fastest growing. The combined revenues of 290 companies in the Healthcare sector group increased from $2.02 trillion during 2015 to $2.24 trillion during 2016 at an annual revenue growth rate of 10.7%. The revenues of companies in Energy & Utilities and Basic Materials sector group declined from $2.34 trillion during 2015 to $2.08 trillion during 2016 at a growth rate of -11.4%.

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Insight 10. Financials is the most profitable sector group   

Of all the sector groups, Financials sector group was the most profitable with a cumulative net profit margin of 15.2% during 2016. The Financials sector group consists of 705 companies. The combined revenues of those companies were $1,952 billion during 2016 and the combined net profit of those companies were $297 billion. The Energy & Utilities and Basic Materials sector group had a negative net profit margin of -0.1% during 2016.

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How R&P Screener Can Help You?

If you are a B2B sales professional, investor, or an entrepreneur, then R&P Screener can help you identify a target list of companies based upon the revenues and profits related criterion. The R&P Screener can also help you quickly generate insights, similar to the above, for your target industries. It can help you answer the following questions for your industries:

1. Pareto Principle. Does Pareto principle (the 80/20 rule) applies to your industry?  Which are the top 20% companies in your industry that generate 80% of the your industry’s total revenues? What is the share of those top 20% companies in your industry’s total profits?

2. Revenue Share. How many companies in your industry are mega corporations, very large companies, large companies and medium size companies? Which companies are they? What is the revenue share of mega, very large, large, and medium-size companies in your industry’s total revenues?

3. Profits Share. What is the profits share of mega, very large, large, and medium-size companies in your industry’s total profits?

4. Profits and Losses. How many companies in your industry had a positive net income and how many had a negative net income? Which companies are they?

5. Revenue Growth. How many companies in your industry had a positive revenue growth and how many had a negative revenue growth? Which companies are they?

6. Net Income Growth. How many companies in your industry had a positive net income growth and how many had a negative net income growth? Which companies are they?

7. Net Profit Margin. How many companies in your industry had a positive net profit margin and how many had a negative net profit margin? Which companies are they?

8. Headquarters Location. Which are the top five states where headquarters of the companies in your industry are located? How many companies are located in those top five states? What is their share of total number of companies? Which companies are they?

9. Industry Profit Margin. What is the cumulative net profit margin (combined net profit of all the companies divided by combined revenues of all the companies) of your industry? How many companies have their net profit margin more than the industry net profit margin? How many companies have less?

10. Industry Revenue Growth. What is the cumulative revenue growth of your industry? How many companies have their revenue growth more than the industry revenue growth? How many companies have less?

Notes

Fiscal Year versus Calendar Year

The reported revenues and net income correspond to the fiscal year of the companies. If a company’s fiscal year ended in September 2016, then we report revenues for the twelve-months period ending in September 2016. Similarly, if a company’s fiscal year ended in May 2016, then we report revenues for the twelve-months period ending in May 2016.

Which companies are included in the R&P Screener?

  • R&P Screener includes US Companies listed in New York Stock Exchange (NYSE), Nasdaq, and Amex (now known as NYSE markets). These companies regularly file their quarterly (10-Q) and annual (10-K) reports with Securities and Exchange Commission (SEC) in the US. These companies were incorporated in US and have headquarters in US as well.
  • US companies that were founded in US, but have headquarters outside the US are also included. These companies have headquarters outside the US due to taxation benefits, foreign governments incentives, proximity to customers, or some other reasons. Since more than 50% of the stocks of these companies are traded in US stock exchanges, they file 10-Ks and 10-Qs similar to the US-headquartered companies.
  • All the companies in the R&P Screener had revenues of more then $50 million in 2016.

Which companies are not included in the R&P Screener?

  • US companies listed in OTC markets.
  • Private companies in the US.
  • Any companies delisted from NYSE, Nasdaq, or Amex stock exchanges. These companies may have been acquired, filed for bankruptcy, or may have become private entities.
  • Any foreign companies listed in US stock exchanges. These companies do not file 10-Q or 10-K. Instead, they provide their annual financial information in 20-F reports.