CORPORATIONS: THE 500 & HOW THEY FARED

SINCE the "Fortune 500," which ranks the nation's largest companies according to sales, first appeared in 1954, corporations on the list have moved up, down, on and off faster than naughty debutantes move out of or back into the bluebook. Last week FORTUNE published its 14th annual 500, and, with the urge to merge rampant everywhere, the ranks were more scrambled than ever.

One of the most interesting changes was right near the top, where the relative positions of the really big firms seldom alter. General Motors was still the biggest industrial corporation in the U.S., as well as in the world, with 1967 sales of $20 billion and net earnings of $1.6 billion. But Ford Motor Co., which had been No. 2 in national standings, fell to No. 3. Moving into second place behind G.M. was Standard Oil (New Jersey). Sales under Chairman Michael Haider (TIME cover, Dec. 29, 1967) were $13.3 billion last year, or nearly $2.8 billion higher than Ford's. Two other corporations among the top ten also moved up. IBM, with sales of $5.3 billion and a lock on the biggest part of the world's computer sales, climbed from ninth place to seventh. Gulf Oil, with sales of $4.2 billion, moved from tenth to ninth.

There was also plenty of push and shove lower down on the list. Nine companies appeared for the first time among the industrial corporations with sales of more than a billion dollars: Ling-Temco-Vought, Signal Oil & Gas, Raytheon, Consolidated Foods, Honeywell, Coca-Cola, Getty Oil, TRW and Colgate-Palmolive. Five other corporations--Inland Steel, Grumman Aircraft Engineering, General Tire & Rubber, Jones & Laughlin Steel, and Olin Mathieson Chemical--fell out of that group. In sum, including also the merger of the billion-dollar member Douglas Aircraft into McDonnell Douglas last year, there was a net gain of three--to a total of 83--in the elite of the corporate world with sales in ten figures or more.

In other-than-industrial categories, the leaders were unchanged. Bank of America is still the nation's biggest bank; Prudential, by a whisker ($511,000 higher assets) over Metropolitan Life, is still the biggest insurance company. Sears, Roebuck is far and away the biggest merchandiser, Penn Central the biggest transportation company, and A.T. & T. by much more than whiskers the biggest utility. (A.T. & T., were its revenues considered as sales, would stand third if it were included among the industrials.)

Size is not everything; FORTUNE also measures profitability. On the basis of earnings as a percentage of invested capital, 180th largest industrial firm Avon Products was the best performer with 37.3%. On the basis of earnings as a percentage of total sales, Amerada Petroleum, the 337th company on the list, ranked highest with 26.7%. By either measure, Polaroid and such drug firms as G. D. Searle, Smith Kline & French Laboratories and Merck were outstanding performers.

Since it covers all of the biggest corporations in the U.S., the FORTUNE list in total terms is a quick check on the state of business. Last year, by FORTUNE'S total's, the check showed mixed returns. Sales of the 500 companies were higher than ever, up 7.9%, to $359 billion. Assets grew 12.3%, to $317 billion. But earnings, with a cost-profit squeeze still on, fell 3%, to $21.4 billion.

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