Johnson & Johnson (NYSE:JNJ)

The financial data reflects notable fluctuations and trends in intangible assets and goodwill over the observed five-year period.

Patents and Trademarks

The value of patents and trademarks experienced moderate variations, starting at 39,990 million US dollars in 2020, slightly declining to 38,572 million in 2021, then rising to 44,012 million in 2022. A dip occurred again in 2023 to 40,417 million, followed by a recovery to 44,695 million by the end of 2024, indicating fluctuating investment or valuation changes in these assets across the years.

Customer Relationships and Other Intangibles

This category demonstrated relatively stable figures around 22,000 million US dollars in the first three years, with 22,898 million in 2020, 23,011 million in 2021, and 22,987 million in 2022. However, a significant decrease is observable in 2023 and 2024 to approximately 20,300 million each year, suggesting possible impairment, disposal, or revaluation adjustments affecting customer-related intangible assets.

Intangible Assets with Definite Lives (Gross and Net)

Gross intangible assets with definite lives showed a rising trend from 62,888 million in 2020 to a peak of 66,999 million in 2022, followed by a decline to 60,739 million in 2023 and recovery to 65,005 million in 2024. Accumulated amortization increased steadily each year, from -28,530 million in 2020 to -39,668 million in 2024, reflecting ongoing systematic amortization. Consequently, the net intangible assets with definite lives fluctuated, decreasing from 34,358 million in 2020 to 29,570 million in 2021, then rising to 31,832 million in 2022, followed by a sharp decline to 23,246 million in 2023, and a partial recovery to 25,337 million in 2024. This pattern suggests enhanced amortization expense and asset write-downs impacting net values.

Trademarks

Trademarks show a consistent downward trend from 7,195 million in 2020 to 6,807 million in 2022, with a significant drop to 1,714 million in 2023. Data for 2024 is not provided, making it difficult to assess the most recent trend. The steep decline could indicate divestiture or impairment.

Purchased In-Process Research and Development

This asset category declined from 11,849 million in 2020 to 9,215 million in 2023 but rebounded significantly to 12,281 million in 2024. The initial decline might indicate completion or reclassification of projects, whereas the 2024 increase could reflect new acquisitions or investments in research and development projects.

Intangible Assets with Indefinite Lives

Intangible assets with indefinite lives continually decreased from 19,044 million in 2020 to 10,929 million in 2023. However, the value increases to 12,281 million in 2024, suggesting impairment or disposal in the earlier years and possible acquisitions or revaluations in the final year.

Intangible Assets, Net

The net intangible assets experienced a decline from 53,402 million in 2020 to 34,175 million in 2023 and a slight recovery to 37,618 million in 2024, broadly mirroring previous trends in amortization, impairment, and acquisition activities.

Goodwill

Goodwill showed variability with a decrease from 36,393 million in 2020 to 35,246 million in 2021, then a strong increase to 45,231 million in 2022. It dropped again to 36,558 million in 2023 before rising to 44,200 million in 2024. These fluctuations likely result from acquisitions, impairments, and periodic reassessments of the fair value of acquired assets.

Intangible Assets and Goodwill (Combined)

The combined value of intangible assets and goodwill echoed the trends of its components, decreasing from 89,795 million in 2020 to 70,733 million in 2023, followed by a recovery to 81,818 million in 2024. This overall pattern indicates net asset reductions due to amortization, impairments, or disposals, partially offset by acquisitions or upward revaluations in later periods.

The financial data reveals distinct trends in both reported and goodwill-adusted figures over the five-year period ending in 2024.

Total Assets

Reported total assets exhibited a general upward trajectory from 174,894 million US dollars in 2020, increasing steadily to reach 187,378 million in 2022. However, a notable decline occurred in 2023 when reported assets dropped to 167,558 million, before partially recovering to 180,104 million in 2024. Adjusted total assets, which exclude goodwill, also demonstrated growth initially from 138,501 million in 2020 to 146,772 million in 2021, but subsequently declined to 142,147 million in 2022 and further decreased to 131,000 million in 2023, followed by a slight increase to 135,904 million in 2024. The adjusted totals consistently remained lower than the reported figures, reflecting the impact of goodwill adjustments.

Shareholders' Equity

The reported shareholders’ equity showed a steady increase from 63,278 million in 2020 to a peak of 76,804 million in 2022. This was followed by a decrease to 68,774 million in 2023 and a modest rebound to 71,490 million in 2024. On the other hand, adjusted shareholders’ equity, which factors out goodwill, rose substantially from 26,885 million in 2020 to 38,777 million in 2021, but then declined to 31,573 million in 2022. Subsequently, it fluctuated slightly, rising to 32,216 million in 2023 before decreasing again to 27,290 million in 2024. The adjusted equity values are considerably lower than the reported figures, highlighting the significance of goodwill on the equity base and indicating variability more pronounced than in reported figures.

Overall, while both reported and adjusted metrics initially expanded over the early years, they experienced contractions in the later periods, with reported values showing partial recovery in 2024. The goodwill adjustments notably reduce asset and equity figures, revealing underlying asset and equity trends excluding intangible goodwill values. This suggests that the company’s tangible asset base and equity strength saw periods of contraction, particularly in the most recent years, contrasting with earlier growth phases.

The financial data reveals notable trends over the five-year period with distinctions between reported and goodwill adjusted figures.

Total Asset Turnover

The reported total asset turnover ratio shows a moderate increase from 0.47 in 2020 to 0.52 in 2021, then stabilizes slightly around 0.51 in subsequent years, ending at 0.49 in 2024. This suggests the company's efficiency in using assets to generate sales improved initially but plateaued and slightly declined later.

The adjusted total asset turnover, which excludes goodwill, consistently remains higher than the reported figures, rising steadily from 0.60 in 2020 to 0.67 in 2022, and then marginally declining to 0.65 by 2024. This indicates that the underlying asset base excluding goodwill has been used more effectively over time.

Financial Leverage

The reported financial leverage ratio decreases from 2.76 in 2020 to about 2.44 in 2022 and stays stable through 2023, with a slight increase to 2.52 in 2024. This points to a modest reduction in leverage initially, followed by a stabilization.

In contrast, adjusted financial leverage, which presumably excludes goodwill-related assets, fluctuates more significantly. It starts very high at 5.15 in 2020, drops considerably to 3.79 in 2021, then rises again to 4.98 in 2024. These variations suggest changes in the company's use of debt relative to tangible adjusted assets, indicating shifting financing structures or asset bases.

Return on Equity (ROE)

The reported ROE experiences considerable volatility, increasing from 23.25% in 2020 to 28.2% in 2021, then dipping to 23.36% in 2022 before surging dramatically to 51.11% in 2023 and declining sharply to 19.68% in 2024. This reflects fluctuating profitability for shareholders and possible exceptional items or operational changes affecting net income or equity.

The adjusted ROE, excluding goodwill, remains substantially higher throughout, indicating that goodwill adjustments significantly impact equity profitability metrics. It exhibits a strong upward trend overall, peaking at 109.12% in 2023 before decreasing to 51.54% in 2024, following a similar pattern to the reported ROE but on a magnified scale.

Return on Assets (ROA)

The reported ROA shows a pattern comparable to ROE, rising from 8.41% in 2020 to 11.47% in 2021, then declining to 9.57% in 2022 before a sharp increase to 20.98% in 2023 and a decrease to 7.81% in 2024. This indicates variable effectiveness in generating earnings from total assets over the period.

Adjusted ROA values are consistently higher than reported figures, highlighting the effect of removing goodwill. These values increase from 10.62% in 2020 to a peak of 26.83% in 2023, followed by a drop to 10.35% in 2024, mirroring the volatility seen in adjusted ROE and illustrating the adjusted asset base's impact on profitability efficiency.

Overall, the analysis indicates that the company's performance as measured by asset turnover, financial leverage, ROE, and ROA is significantly influenced by goodwill adjustments. The adjusted metrics generally report higher efficiency and profitability levels, but they also exhibit greater volatility. The peak in 2023 across several adjusted indicators suggests an exceptional performance year or accounting changes impacting goodwill adjustments. The subsequent declines in 2024 imply a return to more normalized profitability and leverage levels.

The analysis of the financial data over the five-year period shows several notable trends in the asset base and asset utilization efficiency.

Total Assets

The reported total assets demonstrate a general upward trend from 2020 through 2022, increasing from 174,894 million US dollars to 187,378 million US dollars. However, a decline is observed in 2023, falling to 167,558 million US dollars, followed by a recovery in 2024 to 180,104 million US dollars. Meanwhile, adjusted total assets, which exclude goodwill, follow a somewhat different pattern. They rise from 138,501 million US dollars in 2020 to a peak of 146,772 million US dollars in 2021, then decrease steadily through 2024 to 135,904 million US dollars. This decline in adjusted assets suggests possible amortization, impairment, or revaluation of non-goodwill assets over the latter years.

Total Asset Turnover

The reported total asset turnover ratio improves from 0.47 in 2020 to 0.52 in 2021, indicating enhanced efficiency in utilizing assets to generate revenue. This ratio then remains relatively stable at around 0.51 from 2022 to 2023 before slightly declining to 0.49 in 2024. In contrast, the adjusted total asset turnover ratio consistently shows higher values compared to the reported figures, starting at 0.60 in 2020 and reaching its highest level of 0.67 in 2022. Although it decreases to 0.65 in 2023 and remains stable in 2024, the adjusted turnover ratio reflects consistently better asset efficiency when excluding goodwill. This may indicate that non-goodwill assets are being utilized more effectively to generate revenue than when goodwill is included.

Overall Observations

The divergence between reported and adjusted asset figures and turnover ratios highlights the impact of goodwill on both asset base size and efficiency metrics. The peak and subsequent decline in adjusted total assets could affect interpretations of asset management, emphasizing the importance of analyzing adjusted figures for operational insights. The relatively stable reported asset turnover combined with a slight decline in 2024 suggests a modest reduction in asset utilization efficiency. However, the higher and more variable adjusted turnover ratios point to stronger underlying business performance in asset use when excluding goodwill.

The financial data reveals several noteworthy trends in the reported and goodwill adjusted figures over the five-year period analyzed.

Total Assets

Reported total assets exhibited a general upward trend from 174,894 million US$ in 2020 to 180,104 million US$ in 2024, despite a decline in 2023. The peak within the period was in 2022 at 187,378 million US$. Adjusted total assets, which exclude goodwill, demonstrated a more fluctuating pattern, rising initially from 138,501 million US$ in 2020 to 146,772 million US$ in 2021, then declining to 142,147 million US$ in 2022, followed by a continued decrease in 2023 to 131,000 million US$ and a mild recovery in 2024 to 135,904 million US$. This suggests variability in the tangible asset base after adjusting for intangible asset values.

Shareholders’ Equity

Reported shareholders’ equity followed an increasing path from 63,278 million US$ in 2020 up to 76,804 million US$ in 2022, then decreased to 68,774 million US$ in 2023 before partially recovering to 71,490 million US$ in 2024. In contrast, adjusted shareholders’ equity, presumably net of goodwill, experienced a steep rise between 2020 (26,885 million US$) and 2021 (38,777 million US$), followed by a significant decline in 2022 to 31,573 million US$, a slight increase in 2023, and then a notable drop to 27,290 million US$ in 2024. The fluctuations in adjusted equity imply material changes in intangible asset valuations or impairment adjustments affecting equity.

Financial Leverage

The reported financial leverage ratio showed a steady decrease from 2.76 in 2020 to 2.44 in 2022 and 2023, indicating a strengthening equity position relative to total assets, with a slight increase to 2.52 in 2024. Meanwhile, adjusted financial leverage, reflecting the exclusion of goodwill, displays more volatility: a sharp decline from 5.15 in 2020 to 3.79 in 2021, an increase to 4.50 in 2022, a decrease to 4.07 in 2023, and a rise again to 4.98 in 2024. This variability underscores shifts in the company's financing structure when considering only tangible assets, highlighting periods of increased leverage risk.

Overall, the data suggests that while reported figures indicate moderate stability and gradual growth in total assets and equity, the goodwill-adjusted numbers reveal considerable fluctuation in asset quality and equity value. The adjusted financial leverage's volatility further emphasizes variations in indebtedness when intangible assets are excluded, which might reflect changes in asset impairment, acquisitions, or divestitures affecting goodwill valuation. These patterns underscore the importance of assessing both reported and adjusted metrics for a comprehensive understanding of the company's financial condition.

An examination of the financial data over the five-year period reveals several notable trends and variations in both reported and goodwill-adjusted measures of shareholders’ equity and return on equity (ROE).

Shareholders’ Equity

The reported shareholders’ equity experienced an overall increase from 63,278 million US dollars at the end of 2020 to 71,490 million US dollars at the end of 2024. The peak was observed in 2022 with 76,804 million US dollars, followed by a decline in 2023 to 68,774 million and a slight recovery in 2024.

In contrast, the adjusted shareholders’ equity, which accounts for goodwill adjustments, displayed more volatility. Starting at 26,885 million US dollars in 2020, it rose significantly to 38,777 million by the end of 2021, then declined steadily to 27,290 million by the end of 2024. This suggests a notable impact of goodwill adjustments reducing the equity base over time after a peak in 2021.

Return on Equity (ROE)

The reported ROE showed considerable fluctuation, increasing from 23.25% in 2020 to a high of 51.11% in 2023, then decreasing to 19.68% in 2024. This spike in 2023 indicates a short-term enhancement in profitability or efficiency relative to reported equity before returning closer to earlier levels.

The adjusted ROE, reflecting profitability relative to equity excluding goodwill, was consistently higher than reported ROE throughout the period. It remained above 50%, starting at 54.73% in 2020, peaking sharply at 109.12% in 2023, and settling back to 51.54% in 2024. The marked increase in 2023 again signals a strong return on the adjusted equity base, suggesting operational performance or asset efficiency improvements when goodwill is excluded.

Overall, the data indicate that goodwill adjustments significantly affect the equity base and ROE metrics, with adjusted figures showing higher returns and greater volatility. The peak performance year across most metrics was 2023, followed by a notable decline in equity and ROE in 2024, signaling potential challenges or adjustments impacting shareholder value and profitability in the most recent year.

The analysis of the financial data reveals several notable trends in the company's assets and return on assets (ROA) over the reported periods.

Total Assets

Reported total assets exhibited a general upward trend from 174,894 million USD at the end of 2020 to a peak of 187,378 million USD in 2022, followed by a significant decline to 167,558 million USD in 2023, and then a partial recovery to 180,104 million USD in 2024. This fluctuation suggests variability in asset accumulation or divestitures during this timeframe.

Adjusted total assets, which exclude goodwill, showed a similar pattern but at consistently lower levels compared to reported figures, starting at 138,501 million USD in 2020 and rising to 146,772 million USD in 2021. Afterwards, there was a decline to 142,147 million USD in 2022, a further decrease to 131,000 million USD in 2023, and a slight increase to 135,904 million USD in 2024. The downward trend after 2021 indicates possible impairment or revaluation of intangible assets including goodwill.

Return on Assets (ROA)

Reported ROA showed variability, increasing from 8.41% in 2020 to 11.47% in 2021, then decreasing to 9.57% in 2022. There was a marked spike to 20.98% in 2023, followed by a sharp decrease to 7.81% in 2024. This significant volatility in ROA could be due to changes in net income or asset base affecting profitability ratios.

Adjusted ROA, excluding goodwill effects, was consistently higher than reported ROA across all periods, starting at 10.62% in 2020 and peaking at 26.83% in 2023. Similar to reported ROA, adjusted ROA showed an increase through 2021 and 2023, followed by a decline in 2024 to 10.35%. The higher magnitude of adjusted ROA suggests that goodwill adjustments enhance the apparent asset efficiency and profitability.

General Insights

The divergence between reported and adjusted asset values and ROA indicates that goodwill plays a substantial role in the asset base and profitability measurement. The drop in both asset measures in 2023 likely influenced the sharp increase in ROA, highlighting the sensitivity of profitability ratios to asset base fluctuations. The rebound in assets in 2024 accompanied by a decline in ROA points to possible earnings pressure or asset quality changes.

Overall, these trends reflect periods of asset revaluation or restructuring and volatile profitability performance which should be further investigated to understand their operational or strategic drivers.