Johnson & Johnson

Key Performance Metrics

  • The review of Net Profit Margin witnessed a declining/surging trend. The Net Profit Margin improved from 1.70% in 2017 to 22.26% in 2021.
  • The average EBIT Margin for the period under analysis was 24.55%, with 2020 and 2021 performing the worst and best, respectively.
  • In the current year, Johnson & Johnson was able to cover its interest liabilities 129 times in the current year- compared to 2017 when it was 20 times.
  • The Asset turnover stood at 0.52 times in 2021 from 0.49 in 2017, implying a high 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 6.71% between 2017 and 2018 and a further 0.59% increase was recorded between 2018 and 2019. There also occurred an increase of 13.55% between 2020 and 2021 (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 1.21:1/0.99:1 to 1.35:1/1.12:1 on the last year. Which implies that the company [does not have]/has enough assets to settle its current liabilities.

Capital Structure

  • Johnson & Johnson is both equity and debt financed.
  • The debt-to-equity (D/E) ratio has been falling year on year. The gearing position of the company appears to be high as it stood at 146% in the current year.

Source: Johnson & Johnson Annual Report

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