Johnson & Johnson (JNJ)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 167,558,000 | 166,061,000 | 191,686,000 | 195,969,000 | 187,378,000 | 175,124,000 | 177,724,000 | 178,355,000 | 182,018,000 | 179,228,000 | 176,440,000 | 172,557,000 | 174,894,000 | 170,693,000 | 158,380,000 | 155,017,000 | 157,728,000 | 155,521,000 | 155,117,000 | 150,027,000 |
| Total stockholders’ equity | US$ in thousands | 68,774,000 | 71,228,000 | 75,149,000 | 70,869,000 | 76,804,000 | 74,599,000 | 76,357,000 | 74,709,000 | 74,023,000 | 70,272,000 | 69,580,000 | 65,834,000 | 63,278,000 | 64,473,000 | 62,978,000 | 61,294,000 | 59,471,000 | 58,210,000 | 60,785,000 | 58,955,000 |
| Financial leverage ratio | 2.44 | 2.33 | 2.55 | 2.77 | 2.44 | 2.35 | 2.33 | 2.39 | 2.46 | 2.55 | 2.54 | 2.62 | 2.76 | 2.65 | 2.51 | 2.53 | 2.65 | 2.67 | 2.55 | 2.54 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $167,558,000K ÷ $68,774,000K
= 2.44
The financial leverage ratio for Johnson & Johnson has exhibited fluctuations over the past eight quarters, ranging from 2.33 to 2.77. The ratio indicates that, on average, the company relies on debt to finance its assets at a level of approximately 2.44 times.
A high financial leverage ratio suggests that a company is using a higher level of debt in its capital structure, which can amplify returns on equity when operating income is greater than the cost of debt. However, it also indicates a higher financial risk and vulnerability to economic downturns or interest rate increases.
The downward trend in the financial leverage ratio from Q1 2023 to Q3 2023 followed by an increase in Q4 2023 indicates fluctuations in Johnson & Johnson's debt levels relative to its equity during these periods. Further analysis of the company's overall debt profile, interest coverage ratio, and future debt repayment obligations would provide more insights into its financial health and risk profile.
Peer comparison
Dec 31, 2023