Is Apple now the world’s biggest firm?

This is a classic Business Studies question to which the most accurate response is probably, “it depends on how you measure size”. And according to The Guardian, Apple really IS the biggest company, by one measure. Today, at any rate.

The measure of size being used here is the value of all the company’s shares, which is referred to as a company’s market capitalisation. Stock market turmoil in Wall Street has helped Apple pip (geddit?) oil group Exxon (which trades in the UK as Esso) to become the world’s most valuable company. As the US stock markets bounced back from last week’s crash Apple overtook Exxon with a market value of $337bn compared to ExxonMobil’s $334bn. Exxon could easily slip back into the lead if the recent fears for the global economy subside but the gap is so close that the two look certain to be battling it out for some time.

In part Apple’s gain is down to Exxon’s loss. Exxon’s value has been hit by the economic slowdown and depressed oil prices brought about by the financial turmoil. Its shares were as high as $87.98 in April but were trading at just under $70 three months later. So the ‘league table’ of big firms as measured by market capitalisation is very fluid. In January 2006, with a value of $72.1bn, Apple’s value surpassed Dell. In May 2010, Apple achieved a huge milestone, passing Microsoft in market capitalisation. Microsoft (presently valued at $205bn) was the largest company in the world by market capitalisation for two years in the late 1990s. Now Apple has left all its tech peers behind and is jostling for position with the oil industry’s biggest beast.

Apple has shown gravity-defying growth and delivered record results after record results. Over the last three months is profits have been strengthened by strong sales of its iPhones, iPads and record sales of its Mac computers. It sold 20.34m iPhones – more than double the number in the same period last year – and 9.25m iPads, almost triple the number sold during its debut quarter in 2010.

Mighty profits, but I am sure that there are bigger firms by revenue, such as Wal-Mart. And remember that not all Business organisations are public limited companies (PLCs). Britain’s National Health Service makes Apple look like a midget by several measures; not least its payroll of 1.3m members of staff. Then there are other state owned firms like Saudi Arabia’s oil giant ARAMCO which is vastly bigger than the entire world’s listed oil companies in terms of revenues and the amount of oil it pumps.

Earlier in the year we posed similar questions with which is bigger, McDonalds or Subway? (which turns out to be determined by number of outlets) and we even discussed The ‘Tesco’: a new unit of measurement?

Whilst we’re on the subject, it’s always worth wondering if bigger is better. Small firms seemed to be in the ascendant over the last twenty years, but there may be evidence that the giants are returning: see Back and Bigger than Ever.