Johnson & Johnson (JNJ)

Debt-to-capital ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
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
Debt-to-capital ratio		0.30	0.27	0.26	0.29	0.34

December 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $30,651,000K ÷ ($30,651,000K + $71,490,000K)
= 0.30

The debt-to-capital ratio for Johnson & Johnson has shown a declining trend over the past five years, decreasing from 0.34 as of December 31, 2020, to 0.30 as of December 31, 2024. This ratio measures the proportion of the company's capital structure represented by debt. A lower debt-to-capital ratio indicates a smaller reliance on debt financing compared to equity financing.

The decreasing trend in the debt-to-capital ratio suggests that Johnson & Johnson has been reducing its debt levels relative to its total capital over the years. This can indicate improved financial stability and reduced financial risk for the company. However, it is important to note that a certain level of debt can be healthy for a company as it can provide tax benefits and leverage for growth opportunities.

Overall, the declining debt-to-capital ratio for Johnson & Johnson signifies a positive trend in its capital structure management, reflecting a more balanced mix of debt and equity in its financing strategy.