Johnson & Johnson (JNJ)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 69.24% | 69.75% | 69.74% | 68.47% | 65.91% |
| Operating profit margin | 35.54% | 36.21% | 37.11% | 19.02% | 17.63% |
| Pretax margin | 18.83% | 43.90% | 27.35% | 24.40% | 20.08% |
| Net profit margin | 15.87% | 41.84% | 22.59% | 22.36% | 17.91% |
Johnson & Johnson has demonstrated a consistent improvement in its profitability ratios over the past five years. The gross profit margin has increased steadily from 65.91% in 2020 to 69.24% in 2024, indicating the company's ability to maintain a high level of profitability after accounting for the cost of goods sold.
Similarly, the operating profit margin has shown significant improvement, rising from 17.63% in 2020 to 35.54% in 2024. This suggests that Johnson & Johnson has been able to effectively control its operating expenses and generate more profit from its core business operations.
The pretax margin also reflects a positive trend, increasing from 20.08% in 2020 to 18.83% in 2024. This indicates that the company has been able to enhance its operational efficiency and effectively manage its pre-tax earnings relative to its total revenue.
However, the net profit margin witnessed fluctuations during the period under review, reaching its peak at 41.84% in 2023 and dipping to 15.87% in 2024. Although the company experienced a significant increase in its profitability in 2023, the decline in 2024 suggests potential challenges in sustaining the high level of net income relative to total revenue in the most recent year.
Overall, Johnson & Johnson's profitability ratios demonstrate a positive trajectory, with a particular focus on improving operating efficiency and managing costs effectively to drive profitability.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 17.48% | 18.16% | 15.73% | 9.75% | 8.29% |
| Return on assets (ROA) | 7.81% | 20.98% | 9.57% | 11.47% | 8.41% |
| Return on total capital | 16.41% | 39.79% | 21.22% | 22.07% | 17.41% |
| Return on equity (ROE) | 19.68% | 51.11% | 23.36% | 28.20% | 23.25% |
Johnson & Johnson's profitability ratios have shown varying trends over the past five years. The Operating Return on Assets (Operating ROA) has increased consistently from 8.29% in 2020 to 18.16% in 2023, indicating the company's ability to generate operating profits from its assets. However, there was a slight dip to 17.48% in 2024.
The Return on Assets (ROA) experienced fluctuations, with a significant peak of 20.98% in 2023, followed by a decrease to 7.81% in 2024. This ratio reflects the firm's efficiency in utilizing its assets to generate profits.
The Return on Total Capital exhibited a substantial increase from 17.41% in 2020 to 39.79% in 2023, showcasing the company's ability to generate returns for both debt and equity investors. However, there was a decline to 16.41% in 2024.
The Return on Equity (ROE) also portrayed variability, with a notable spike to 51.11% in 2023, signifying strong returns for equity shareholders. This was followed by a decrease to 19.68% in 2024, indicating a decrease in profitability relative to the equity invested by shareholders.
Overall, while Johnson & Johnson has shown overall positive profitability ratios, there are fluctuations in certain ratios that may warrant further investigation into the company's financial performance and efficiency in utilizing its assets and capital.