Stock Analysis on Net

Johnson & Johnson (NYSE:JNJ)

Analysis of Debt 

Microsoft Excel

Total Debt (Carrying Amount)

Johnson & Johnson, balance sheet: debt

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
Loans and notes payable 3,451 12,771 3,766 2,631 1,202
Long-term debt, excluding current portion 25,881 26,888 29,985 32,635 26,494
Total borrowings (carrying amount) 29,332 39,659 33,751 35,266 27,696

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29).

Debt item Description The company
Total borrowings (carrying amount) Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. Johnson & Johnson total debt increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Total Debt (Fair Value)

Microsoft Excel
Dec 31, 2023
Selected Financial Data (US$ in millions)
Short-term borrowings 1,982
Long-term debt, including current portion 26,350
Total borrowings (fair value) 28,332
Financial Ratio
Debt, fair value to carrying amount ratio 0.97

Based on: 10-K (reporting date: 2023-12-31).


Weighted-average Interest Rate on Debt

Weighted average effective rate on borrowings: 3.14%

Interest rate Debt amount1 Interest rate × Debt amount Weighted-average interest rate2
5.37% 1,982 106
2.98% 27,350 815
Total 29,332 921
3.14%

Based on: 10-K (reporting date: 2023-12-31).

1 US$ in millions

2 Weighted-average interest rate = 100 × 921 ÷ 29,332 = 3.14%


Interest Costs Incurred

Johnson & Johnson, interest costs incurred

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
Interest expense, net of portion capitalized 772 276 183 201 318
Interest expense capitalized 70 49 49 63 70
Interest costs incurred 842 325 232 264 388

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29).

Debt item Description The company
Interest expense, net of portion capitalized Amount of the cost of borrowed funds accounted for as interest expense for debt. Johnson & Johnson interest expense, net of portion capitalized increased from 2021 to 2022 and from 2022 to 2023.
Interest expense capitalized Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred.
Interest costs incurred Total interest costs incurred during the period and either capitalized or charged against earnings. Johnson & Johnson interest costs incurred increased from 2021 to 2022 and from 2022 to 2023.

Adjusted Interest Coverage Ratio

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
Selected Financial Data (US$ in millions)
Net earnings 35,153 17,941 20,878 14,714 15,119
Less: Net earnings from discontinued operations, net of tax 21,827
Add: Income tax expense 1,736 3,784 1,898 1,783 2,209
Add: Interest expense, net of portion capitalized 772 276 183 201 318
Earnings before interest and tax (EBIT) 15,834 22,001 22,959 16,698 17,646
 
Interest costs incurred 842 325 232 264 388
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)1 20.51 79.71 125.46 83.07 55.49
Adjusted interest coverage ratio (with capitalized interest)2 18.81 67.70 98.96 63.25 45.48

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29).

2023 Calculations

1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense, net of portion capitalized
= 15,834 ÷ 772 = 20.51

2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 15,834 ÷ 842 = 18.81


Solvency ratio Description The company
Adjusted interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). Johnson & Johnson adjusted interest coverage ratio deteriorated from 2021 to 2022 and from 2022 to 2023.