I do mine by overall power and skill that a shinobi has, the likely hood they have of defeating others on the list, and jutsu arsenal. Edo Tensei is not included, same with KA. I do make some changes, but mine is usually:
1: Hashirama
2: EMS Madara/ War Arc Tobi
3: War Arc Tobi/ EMS Madara
4: Nagato/BM Naruto
5: BM Naruto/Nagato
6: DSM Kabuto
7: EMS Sasuke (Still needs new feats)
8: (Healthy) Itachi/Minato
9: Minato/ (Healthy) Itachi.
10: Third Raikage/Muu/Trollkage/Kisame/Killer Bee/Hanzo
Usually as the list goes up it's harder to decide who is where. As all shinobi become closer and closer in power and skill. So, usually I have somewhere from 10-15 as all those sharing spots and what not.