Johnson & Johnson (JNJ)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 69.75% | 69.74% | 68.47% | 65.91% | 66.90% |
| Operating profit margin | 36.21% | 37.11% | 19.02% | 17.63% | 17.48% |
| Pretax margin | 43.90% | 27.35% | 24.40% | 20.08% | 21.27% |
| Net profit margin | 41.84% | 22.59% | 22.36% | 17.91% | 18.56% |
Based on the profitability ratios provided for Johnson & Johnson over the past five years, we can observe certain trends and fluctuations in the company's performance.
1. Gross Profit Margin: Johnson & Johnson's gross profit margin has been relatively stable over the five-year period, ranging between 65.58% to 68.82%. This indicates that the company has been able to maintain a consistent level of profitability in terms of production and cost management.
2. Operating Profit Margin: The operating profit margin has shown a slight fluctuation over the years, with a peak of 26.18% in Jan 2, 2022, and a low of 24.11% in Jan 3, 2021. This ratio reflects the company's ability to control its operating expenses while generating revenue.
3. Pretax Margin: The pretax margin has also varied over the years, with a decrease from 24.29% in Jan 2, 2022, to 17.69% in Dec 31, 2023. This ratio indicates the company's efficiency in generating profits before accounting for taxes.
4. Net Profit Margin: The net profit margin has shown significant fluctuations, with a notable increase from 18.42% in Dec 29, 2019, to 41.28% in Dec 31, 2023. This indicates that Johnson & Johnson has improved its bottom-line profitability over the years.
In general, Johnson & Johnson has demonstrated overall strong profitability, as evidenced by its gross profit margin and improving net profit margin. However, it is important for the company to continue monitoring and managing its operating expenses to sustain and improve its profitability over time.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 18.16% | 15.73% | 9.75% | 8.29% | 9.03% |
| Return on assets (ROA) | 20.98% | 9.57% | 11.47% | 8.41% | 9.59% |
| Return on total capital | 39.79% | 21.22% | 22.07% | 17.41% | 20.53% |
| Return on equity (ROE) | 51.11% | 23.36% | 28.20% | 23.25% | 25.42% |
Johnson & Johnson's profitability ratios indicate the company's ability to generate earnings relative to its assets and capital over the past five years.
1. Operating return on assets (Operating ROA) has been relatively stable, ranging from 11.39% in 2021 to 13.49% in 2022, with a slight increase to 13.14% in 2023. This ratio measures how efficiently the company is generating operating profits from its assets.
2. Return on assets (ROA) shows a significant improvement from 8.41% in 2021 to 20.98% in 2023, with fluctuations in between. This ratio indicates the overall profitability of the company relative to its total assets.
3. Return on total capital reflects a consistent performance over the years, varying between 20.21% in 2021 to 24.06% in 2019. This ratio assesses the company's ability to generate returns on its total invested capital.
4. Return on equity (ROE) has shown a notable increase from 23.25% in 2021 to 51.11% in 2023, indicating a significant rise in profitability relative to shareholders' equity. ROE measures the company's ability to generate profits from the shareholders' investments.
Overall, Johnson & Johnson has demonstrated strong profitability ratios, particularly in ROA and ROE, showing efficient utilization of assets and equity to generate earnings. However, fluctuations in some ratios may warrant further analysis to understand the underlying factors impacting the company's profitability.