Investment Accounting Policy
Cash Equivalents
Johnson & Johnson considers securities with maturities of three months or less, when purchased, to be cash equivalents.
Investments
Short-term marketable securities are carried at cost, which approximates fair value. Investments classified as available-for-sale are carried at estimated fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income. Long-term debt securities that Johnson & Johnson has the ability and intent to hold until maturity are carried at amortized cost. Management determines the appropriate classification of its investment in debt and equity securities at the time of purchase and re-evaluates such determination at each balance sheet date. Johnson & Johnson periodically reviews its investments in equity securities for impairment and adjusts these investments to their fair value when a decline in market value is deemed to be other than temporary. If losses on these securities are considered to be other than temporary, the loss is recognized in earnings.
Source: Johnson & Johnson, Annual Report
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
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Johnson & Johnson, adjustment to Net Earnings
Adjusted Ratios: Mark to Market Available-for-sale Securities (Summary)
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Johnson & Johnson, adjusted ratios
| Ratio |
Description |
The company |
| Adjusted net profit margin |
An indicator of profitability, calculated as adjusted net income divided by revenue. |
Johnson & Johnson's adjusted net profit margin improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.
|
| Adjusted ROE |
A profitability ratio calculated as adjusted net income divided by shareholders' equity. |
Johnson & Johnson's adjusted ROE deteriorated from 2009 to 2010 and from 2010 to 2011.
|
| Adjusted ROA |
A profitability ratio calculated as adjusted net income divided by total assets. |
Johnson & Johnson's adjusted ROA improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.
|
Adjusted Net Profit Margin
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2011 Calculations
| Ratio |
Description |
The company |
| Adjusted net profit margin |
An indicator of profitability, calculated as adjusted net income divided by revenue. |
Johnson & Johnson's adjusted net profit margin improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.
|
Adjusted Return On Equity (ROE)
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2011 Calculations
| Ratio |
Description |
The company |
| Adjusted ROE |
A profitability ratio calculated as adjusted net income divided by shareholders' equity. |
Johnson & Johnson's adjusted ROE deteriorated from 2009 to 2010 and from 2010 to 2011.
|
Adjusted Return On Assets (ROA)
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2011 Calculations
| Ratio |
Description |
The company |
| Adjusted ROA |
A profitability ratio calculated as adjusted net income divided by total assets. |
Johnson & Johnson's adjusted ROA improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.
|
