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Where the numbers came from: how Platts devised the Top 250 Global Energy Company Rankings
This ninth annual survey of global energy companies by Platts measures companies' financial performance using four key metrics: asset worth, revenues, profits, and return on invested capital.
All companies on the list have assets greater than US $3.5 billion. The fundamental and market data comes from a database compiled and maintained by Capital IQ Compustat, a business of Standard & Poor's, which, like Platts, is a division of The McGraw-Hill Companies.
Energy companies were grouped according to their Global Industry Classification Standard (GICS) code. How a company is described is somewhat subjective and is based on how it generates most of its revenue.
Because the survey is global, and because all countries do not share a common financial reporting standard, the information used is for the full year 2009. Since then, material changes to a company's financial health may have occurred. Data for U.S. companies came from Securities and Exchange Commission (SEC) Form 10K.
The company rankings are derived using a special Platts formula. We added each company's numerical ranking for asset worth, revenues, profits, and ROIC and assigned a rank of 1 to the company with the lowest total, 2 to the company with the second-lowest total, and so on. Earnings per share figures were not included in the ranking calculation because some companies are privately held.
Finally, ROIC figures-widely regarded as a driver of cash flow and value-were calculated using the following equation: ROIC = [(Income before extraordinary items) - (Available for common stock)] ÷ (Total invested capital) x 100 where "Income before extraordinary items" is net income less preferred dividends and "Total invested capital" is the sum of total long-term debt, preferred stock (value), minority interest, and total common equity.
A final note: The Capital IQ Compustat database is not comprehensive. Some companies in developing countries may not be represented.