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Johnson & Johnson (JNJ) | DuPont Analysis: Decomposition of ROE

Decomposing ROE involves expressing net income divided by shareholders' equity as the product of component ratios.


Two-Component Disaggregation of ROE

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Johnson & Johnson, decomposition of ROE

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  ROE = ROA × Leverage
Dec 31, 2011 %   %  
Dec 31, 2010 %   %  
Dec 31, 2009 %   %  
Dec 31, 2008 %   %  
Dec 31, 2007 %   %  

Source: Based on data from Johnson & Johnson Annual Reports

 

The primary reason for the decrease in Return on Equity (ROE) over 2011 year is the decrease in profitability measured by Return on Assets (ROA).

Three-Component Disaggregation of ROE

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Johnson & Johnson, decomposition of ROE

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  ROE = Net Profit Margin × Asset Turnover × Leverage
Dec 31, 2011 %   %    
Dec 31, 2010 %   %    
Dec 31, 2009 %   %    
Dec 31, 2008 %   %    
Dec 31, 2007 %   %    

Source: Based on data from Johnson & Johnson Annual Reports

 

The primary reason for the decrease in Return on Equity (ROE) over 2011 year is the decrease in profitability measured by Net Profit Margin.

Five-Component Disaggregation of ROE

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Johnson & Johnson, decomposition of ROE

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  ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage
Dec 31, 2011 %       %    
Dec 31, 2010 %       %    
Dec 31, 2009 %       %    
Dec 31, 2008 %       %    
Dec 31, 2007 %       %    

Source: Based on data from Johnson & Johnson Annual Reports

 

The primary reason for the decrease in Return on Equity (ROE) over 2011 year is the decrease in operating profitability measured by EBIT Margin.

Two-Way Decomposition of ROA

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Johnson & Johnson, decomposition of ROA

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  chart   chart   chart
  ROA = Net Profit Margin × Asset Turnover
Dec 31, 2011 %   %  
Dec 31, 2010 %   %  
Dec 31, 2009 %   %  
Dec 31, 2008 %   %  
Dec 31, 2007 %   %  

Source: Based on data from Johnson & Johnson Annual Reports

 

The primary reason for the decrease in Return on Assets (ROA) over 2011 year is the decrease in profitability measured by Net Profit Margin.

Four-Way Decomposition of ROA

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Johnson & Johnson, decomposition of ROA

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  chart   chart   chart   chart   chart
  ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2011 %       %  
Dec 31, 2010 %       %  
Dec 31, 2009 %       %  
Dec 31, 2008 %       %  
Dec 31, 2007 %       %  

Source: Based on data from Johnson & Johnson Annual Reports

 

The primary reason for the decrease in Return on Assets (ROA) over 2011 year is the decrease in operating profitability measured by EBIT Margin.

Decomposition of Net Profit Margin

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Johnson & Johnson, decomposition of Net Profit Margin

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  chart   chart   chart   chart
  Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2011 %       %
Dec 31, 2010 %       %
Dec 31, 2009 %       %
Dec 31, 2008 %       %
Dec 31, 2007 %       %

Source: Based on data from Johnson & Johnson Annual Reports

 

The primary reason for the decrease in Net Profit Margin over 2011 year is the decrease in operating profitability measured by EBIT Margin.

May 23, 2012

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