The review of Net Profit Margin witnessed a mixed trend. The Net Profit Margin improved from82% in 2020 to 15.84% in 2024.
The average EBIT Margin for the period under analysis was 71%, with 2024 and 2023 performing the worst and best, respectively.
In the current year, Johnson & Johnson was able to cover its interest liabilities 86 times in the current year- compared to 2020 when it was 98.17 times.
The Asset turnover stood at49 times in 2023 from 0.47 in 2020, implying a low performance on Assets of the business in relation to revenue.
Profitability
The revenue of Johnson & Johnson has increased year on year. The revenue increased by 55% between 2020 and 2021 and a further 14.70% decrease was recorded between 2021 and 2022. There also occurred an increase of 4.30% between 2023 and 2024 (the current period).
Johnson & Johnson’s performance in profitability looks good as the return on capital employed also recorded good performance during the period of analysis.
Liquidity
The company’s result in liquidity looks strong, as current ratio/acid test increased from 16:1/0.91:1 to 1.11:1/0.86:1 on the last year. Which implies that the company has enough assets to settle its current liabilities but relies on its inventories to achieve this.
Capital Structure
Johnson & Johnson is both equity and debt financed.
The debt-to-equity (D/E) ratio has been falling year on year except 2024. The gearing position of the company appears to be high as it stood at 151.93% in the current year.
