Johnson & Johnson (JNJ)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 16,766,000 | 37,661,000 | 22,001,000 | 22,959,000 | 16,698,000 |
| Long-term debt | US$ in thousands | 30,651,000 | 25,881,000 | 26,886,000 | 29,985,000 | 32,635,000 |
| Total stockholders’ equity | US$ in thousands | 71,490,000 | 68,774,000 | 76,804,000 | 74,023,000 | 63,278,000 |
| Return on total capital | 16.41% | 39.79% | 21.22% | 22.07% | 17.41% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $16,766,000K ÷ ($30,651,000K + $71,490,000K)
= 16.41%
Johnson & Johnson's return on total capital has shown fluctuations over the years. It increased from 17.41% in December 2020 to 22.07% in December 2021, indicating improved efficiency in generating profits relative to the total capital employed. In December 2022, the return on total capital slightly declined to 21.22% but remained at a relatively high level.
The significant surge in the return on total capital to 39.79% in December 2023 suggests a substantial increase in profitability relative to the total invested capital, possibly due to strategic decisions or operational improvements. However, in December 2024, the return on total capital decreased to 16.41%, which may indicate challenges in maintaining the same level of profitability compared to the previous year.
Overall, Johnson & Johnson's return on total capital demonstrates the company's ability to generate returns on the total capital employed, although there have been fluctuations in performance over the years. It is essential for the company to continue monitoring and optimizing its capital utilization to ensure sustained profitability.
Peer comparison
Dec 31, 2024