Balance-Sheet-Based Accruals Ratio
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Johnson & Johnson, balance sheet computation of aggregate accruals
USD $ in millions
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
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| Operating Assets | ||||||
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Total assets | |
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Less: Cash and cash equivalents | |
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Less: Marketable securities | |
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Operating assets | |
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| Operating Liabilities | ||||||
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Total liabilities | |
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Less: Loans and notes payable | |
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Less: Long-term debt | |
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Operating liabilities | |
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Net operating assets1 | |
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Balance-sheet-based aggregate accruals2 | |
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| Balance-Sheet-Based Accruals Ratio, Comparison to Industry | ||||||
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Johnson & Johnson3 | % |
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| Industry, Health Care | % |
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% |
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2011 Calculations
1 Net operating assets = Operating assets – Operating liabilities
= – =
2 Balance-sheet-based aggregate accruals = Net operating assets 2011 – Net operating assets 2010
= – =
3 Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] = %
| Ratio | Description | The company |
|---|---|---|
| Balance-sheet-based accruals ratio | Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. | Using the balance-sheet-based accruals ratio, Johnson & Johnson deteriorated earnings quality from 2010 to 2011. |