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The largest companies in the world by market cap, revenue and net profit margin in 2022

The simplest metrics to get a clear picture of any company's financial performance at a glance is by looking at the market capitalisation, revenue, net profit and net profit margin. Of course, there are other metrics that must be considered in order to invest in them but this is not an article on investing but just an informative article on the largest companies in the world.

Towering skyscrapers of the largest companies in the world


Here, we take a look at the largest companies in the world in 2022 ranked by their market cap, revenue, net profit and net profit margin.

The largest company by market value is Apple with a market cap around of $2.6 trillion. Interestingly, apple's market cap crossed $3 trillion just this year. It was the first company to cross $1 trillion market cap in August 2018 and astonishingly doubled to $2 trillion in just 2 years in August 2020. It took about 1.5 years to reach $3 trillion.

Market capitalisation is always varying based on the stock price which is dependent on the financial performance of the company as well as the prevailing market conditions. Market capitalisation is obtained by multiplying the current share price with the total number of shares of the company. Hence, market capitalisation can be viewed as a perception of the company by the market and market participants based on varying factors.

Silhouette of a man in front of the Apple logo

The largest company by revenue is Walmart with a revenue of $572.8 billion. Walmart has held this top spot for revenue since 2014. It has a cool $100 billion more than the it's closest rival in terms of revenue which is Amazon.

Revenue indicates the total sales of products or services including subscriptions or other business models generated by a company. It shows the scale and reach of a company. Large revenue doesn't necessarily guarantee large profits but can show the potential for profits by tweaking the costs incurred and improving marketing and sales.

Photo of a man and woman in front of a Walmart outlet

The largest company by net profit is again Apple with a profit of $94.68 billion. Nearly $5 billion more than it's closest rival in the US in terms of net profit, Berkshire Hathaway. Net income, or net profit gives a complete picture of a company’s profitability. Net income is calculated as the revenue of a company minus all operating expenses, debt payments, interest paid, income from subsidiary holdings, taxes, etc.

But let's not forget the most important metric which is the net profit margin. The flag bearer of value investing, Warren Buffett, truly creates value in Berkshire Hathaway with the highest net profit margin among the companies with the largest revenues. The Image below shows, Warren Buffett, Chairman and CEO of Berkshire Hathaway.

Warren Buffett. Chairman and CEO of Berkshire Hathaway.

The largest company (among largest companies by revenue) by net profit margin is Berkshire Hathaway with a net profit margin of 32.52% which is about 6.6% higher than that of apple despite having nearly $5 billion lower net profit, a nearly $90 billion lower revenue and an incredible, $2 trillion lower market capitalisation than Apple.

Net profit margin indicated what percentage of the revenue is profits generated by the company after all expenses are deducted. It is calculated as net profit divided by revenue (ratio of net profit to revenue) and multiplied by 100 (ratio converted to percentage).

Conclusion

While there are many other ratios and variables in a financial statement, this is the simplest way to understand the state of a company presently and the business potential in the future. Companies can make adjustments to the other ratios and fundamentals as inputs to improve these basic outcomes of the business.

If you're interested in value investing then you must read these valuable insights from the intelligent investor, a book hailed as the best book on investing by Warren Buffett. You find these insights here.

Also, you can find the best financial advice on investing that stands the test of time here.


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