Apple Inc. (NASDAQ:AAPL)’s stock price decline is apparently to blame for its 53-position plunge on Forbes’ annual list of the World’s Most Innovative Companies. The company now ranks 79th on the list, although it was 26th last year. And in 2011, which was the first year Forbes did the list, Apple Inc. (NASDAQ:AAPL) ranked in fifth place, reports Gregg Keizer of Computerworld.


Apple Inc. (AAPL)’s on Forbes list

Computerworld spoke with Forbes managing editor Bruce Upbin, who explained how the magazine calculates each company’s position on the list. He said they use what’s called an “innovation premium,” which they define as the difference between the company’s market capitalization and a net present value of cash flows from existing businesses. The premium also accounts for anticipated growth from the company’s existing businesses.

According to Upbin, Apple Inc. (NASDAQ:AAPL)’s ranking dropped like a rock because its stock price fell through the floor. He said the company’s ranking “is a proxy of what investors think of the future of the company.”

He also said that companies in some industries are entirely excluded from the list, like mining companies, energy companies, banks and companies which do not yet have at least seven years of public financial information. Facebook Inc (NASDAQ:FB), for one, would have made the top ten of this year’s list if just last year’s financial information was used, but it hasn’t been public for seven years so it was automatically disqualified from the list.

Other placements on Forbes’ list, Inc. (NYSE:CRM) still holds the top position on the list, and this is the third year it has done so., Inc. (NASDAQ:AMZN) was in seventh place.

Google Inc (NASDAQ:GOOG), interestingly enough, also plunged down the list this year, falling from 24th place last year to 47th this year. In 2011, the search giant was actually seventh on the list. According to Upbin, Google’s decline doesn’t necessarily mean that its innovation has slowed down. However, it could mean that investors might not see driver-less cars as being as profitable as search revenue has been.