Financial Analysis Johnson & Johnson Essay

Johnson & A ; Johnson is a name trade name. which is known for supplying quality merchandises to consumers. The company focuses on the development of merchandises related to wellness and wellbeing. The company has more than 275 companies. which are located in 60 different states. It is the world’s sixth-largest consumer wellness company. the world’s eighth-largest pharmaceuticals company. the world’s fifth-largest biologics company. the world’s largest nosologies company. and provides the world’s largest and most diverse medical devices ( Our Company. n. d. ) Summary of Operations

Fiscal Position
Johnson & A ; Johnson’s working capital has steadily increased over the last 3-years. It increased from $ 9. 529 ( 1000000s ) in 2010 to $ 11. 141 ( 1000000s ) in 2011. It continued to increase to $ 12. 973 ( 1000000s ) in 2012.

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Johnson & A ; Johnson’s net belongings. works. and equipment increased over the last 3-years. The net value of the company’s fixed assets increased from $ 14. 553 ( 1000000s ) in 2010 to $ 16. 097 ( 1000000s ) in 2012.

The entire assets for the company have increased over the last 3-years. It was $ 102. 908 ( 1000000s ) in 2010. which increased to $ 113. 644 ( 1000000s ) in 2011. In 2012. it increased to $ 121. 347 ( 1000000s ) .

The company’s long-run assets have increased over the last 3-years. It was $ 55. 601 ( 1000000s ) in 2010. $ 59. 328 ( 1000000s ) in 2011. and $ 75. 231 ( 1000000s ) in 2012

The stockholder’s equity has increased over the last 3-years. It went from $ 56. 579 ( 1000000s ) in 2010 to $ 57. 080 ( 1000000s ) in 2011. In 2012. it increased to $ 64. 826 ( 1000000s ) .

Fiscal Ratios
The liquidness ratio measures the adequateness of Johnson & A ; Johnson’s hard currency resources to run into its short-run duties. It is calculated as current assets divided by current liabilities. The company’s current ratio increased from 2010 to 2011. It so declined significantly from 2011 to 2012. It went from 2. 05 to 2. 38. so down to 1. 9. Normally. it is good to hold a low liquidness ratio. such as 1. Johnson & A ; Johnson’s liquidness ratio has improved over the last 3-years. The current liquidness ratio indicates it is able to pay or cover its short-run debts ( Kokemuller. n. d. ) .

The purchase ratio measures the shareholders’ equity to debt. which was used to fiance the company’s assets. A low ratio figure indicates there is less of a claim on company assets by the debt holder. which means a lower hazard. The company showed a 0. 2965 in 2010. which is truly low. It increased to 0. 3439 the following twelvemonth. which means the company had a somewhat higher hazard. In 2012. the ratio dropped down to 0. 2494 ( Johnson & A ; Johnson Debt. n. d. ) .

The profitableness ratio includes both the gross net income border and the operating net income border. The gross net income border is calculated as gross net income divided by gross revenues. The gross net income border per centum measures the per centum of gross revenues dollars staying after the company has paid for its goods. In 2010. the gross net income border was 69. 49 % . It declined to 68. 69 % in 2011. In 2012. the gross net income border declined even further to 67. 78 % . The operating net income border is calculated as operating net incomes divided by gross revenues. The operating net income border measures the per centum of gross revenues dollars staying after all costs and disbursals other than involvement and revenue enhancements are deducted. It is the pure net incomes earned from the gross revenues dollar. A higher operating net income border is preferred. In 2010. the operating net income border was 26. 84 % . In 2011. it declined to 23. 96 % . In 2012. it continued to worsen to 23. 61 % .

The efficiency ratio is an indicant of how effectual the company has utilized its assets. how fast it collects gross. and how rapidly it can sell its stock list. Asset turnover is calculated as gross revenues divided by
mean entire assets.

Histories receivable is calculated as gross revenues divided by mean histories receivable.

Inventory turnover is calculated as cost of goods sold divided by mean stock list.

Fixed plus turnover is calculated as gross revenues divided by mean fixed assets.

Working capital histories collectible turnover is calculated as histories receivable turnover plus stock list turnover.

Historical View of Financial Performance

Mentions
Johnson & A ; Johnson Annual Report 2010. ( n. d. ) . Retrieved April 17. 2013. from Johnson & A ; Johnson web site: hypertext transfer protocol: //www. jnj. com/wps/wcm/connect/JnJ. Com % 20Development/development/pdf/publications-pdf/2010+annual+report? contentIDR Johnson & A ; Johnson Annual Report 2011. ( n. d. ) . Retrieved April 17. 2013. from Johnson & A ; Johnson web site: hypertext transfer protocol: //www. jnj. com/wps/wcm/connect/JnJ. Com % 20Development/development/pdf/publications-pdf/2011-annual-report_final. pdf? carbon monoxide Johnson & A ; Johnson Annual Report 2012. ( n. d. ) . Retrieved April 17. 2013. from Johnson & A ; Johnson web site:

hypertext transfer protocol: //files. stockholder. com/downloads/JNJ/2374594897x0x644760/85FD0CFF-2305-4A02-8294-2E47D0F31850/JNJ2012annualreport. pdf Johnson & A ; Johnson Debt to Equity Ratio. ( n. d. ) . Retrieved April 19. 2013. from hypertext transfer protocol: //ycharts. com/companies/JNJ/debt_equity_ratio

Kokemuller. N. ( n. d. ) . What Does it Mean When Your Quick Ratio is Below Industry? Retrieved April 17. 2013. from Chron web site:
hypertext transfer protocol: //smallbusiness. chron. com/mean-quick-ratio-below-industry-20412. html Our Company. ( n. d. ) . Retrieved April 17. 2013. from Johnson & A ; Johnson web site: hypertext transfer protocol: //www. jnj. com/connect/about-jnj/