Johnson & Johnson (JNJ)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.17 | 0.18 | 0.17 | 0.15 | 0.15 | 0.16 | 0.18 | 0.18 | 0.14 | 0.16 | 0.16 | 0.16 | 0.16 | 0.17 | 0.17 | 0.18 | 0.19 | 0.19 | 0.16 | 0.16 |
| Debt-to-capital ratio | 0.30 | 0.31 | 0.31 | 0.26 | 0.27 | 0.27 | 0.31 | 0.33 | 0.26 | 0.27 | 0.27 | 0.28 | 0.29 | 0.30 | 0.30 | 0.31 | 0.34 | 0.34 | 0.28 | 0.29 |
| Debt-to-equity ratio | 0.43 | 0.45 | 0.44 | 0.36 | 0.38 | 0.37 | 0.45 | 0.49 | 0.35 | 0.37 | 0.37 | 0.39 | 0.41 | 0.43 | 0.44 | 0.46 | 0.52 | 0.51 | 0.40 | 0.41 |
| Financial leverage ratio | 2.52 | 2.54 | 2.53 | 2.46 | 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 |
The solvency ratios of Johnson & Johnson provide insights into the company's ability to meet its long-term financial obligations. Looking at the debt-to-assets ratio, it remained relatively stable around 0.16 to 0.19 from 2020 to 2022, suggesting the company has a low level of debt compared to its total assets.
The debt-to-capital ratio, which indicates the proportion of debt in the company's capital structure, showed a decreasing trend from 0.29 in March 2020 to 0.17 in December 2024. This indicates that the company has been reducing its reliance on debt financing over the years in relation to its total capital.
The debt-to-equity ratio, measuring the company's leverage and financial risk, fluctuated between 0.35 to 0.52 from 2020 to 2024. The decreasing trend from 2022 to 2024 indicates a decrease in financial risk and reliance on equity financing over the period.
The financial leverage ratio, reflecting the proportion of the company's assets financed by debt, shows a downward trend from 2.76 in December 2020 to 2.52 in December 2024. This indicates a reduction in leverage and financial risk for the company over the years.
Overall, Johnson & Johnson's solvency ratios demonstrate a healthy financial position with a conservative approach to debt management and a decreasing trend in financial risk and leverage over the period analyzed.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 199.47 | 58.73 | 82.85 | 50.95 | 42.85 | 41.88 | 21.71 | 33.12 | 80.53 | 138.47 | 160.27 | 164.15 | 125.46 | 94.27 | 87.06 | 73.87 | 83.07 | 96.82 | 81.36 | 81.56 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses.
Analyzing Johnson & Johnson's interest coverage ratio over the past few years, we see a fluctuating trend. The ratio was relatively stable around 80-90 from March 2020 to June 2021, indicating a healthy ability to cover interest expenses.
However, there was a significant increase in the interest coverage ratio starting from December 2021, reaching a peak of 199.47 by December 31, 2024. This sharp increase suggests a substantial improvement in the company's ability to cover its interest payments, indicating a stronger financial position and potentially lower financial risk.
The interest coverage ratio then decreased slightly in the following periods but remained well above 1, indicating that Johnson & Johnson continues to have a solid ability to cover its interest obligations. Overall, the trend in the interest coverage ratio for Johnson & Johnson reflects a positive financial health and strong debt-servicing capacity.