Stock Analysis on Net
Stock Analysis on Net

Johnson & Johnson (NYSE:JNJ)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Johnson & Johnson, balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
Patents and trademarks 40,417 44,012 38,572 39,990 36,634
Customer relationships and other intangibles 20,322 22,987 23,011 22,898 22,056
Intangible assets with definite lives, gross 60,739 66,999 61,583 62,888 58,690
Accumulated amortization (37,493) (35,167) (32,013) (28,530) (22,616)
Intangible assets with definite lives, net 23,246 31,832 29,570 34,358 36,074
Trademarks 1,714 6,807 6,985 7,195 6,922
Purchased in-process research and development 9,215 9,686 9,837 11,849 4,647
Intangible assets with indefinite lives 10,929 16,493 16,822 19,044 11,569
Intangible assets, net 34,175 48,325 46,392 53,402 47,643
Goodwill 36,558 45,231 35,246 36,393 33,639
Intangible assets and goodwill 70,733 93,556 81,638 89,795 81,282

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).

Item Description The company
Intangible assets, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Johnson & Johnson intangible assets, net increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Johnson & Johnson goodwill increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.
Intangible assets and goodwill Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Johnson & Johnson intangible assets and goodwill increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Adjustments to Financial Statements: Removal of Goodwill

Johnson & Johnson, adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
Adjustment to Total Assets
Total assets (as reported) 167,558 187,378 182,018 174,894 157,728
Less: Goodwill 36,558 45,231 35,246 36,393 33,639
Total assets (adjusted) 131,000 142,147 146,772 138,501 124,089
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 68,774 76,804 74,023 63,278 59,471
Less: Goodwill 36,558 45,231 35,246 36,393 33,639
Shareholders’ equity (adjusted) 32,216 31,573 38,777 26,885 25,832

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).

Johnson & Johnson, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Johnson & Johnson, adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
Total Asset Turnover
Reported total asset turnover 0.51 0.51 0.52 0.47 0.52
Adjusted total asset turnover 0.65 0.67 0.64 0.60 0.66
Financial Leverage
Reported financial leverage 2.44 2.44 2.46 2.76 2.65
Adjusted financial leverage 4.07 4.50 3.79 5.15 4.80
Return on Equity (ROE)
Reported ROE 51.11% 23.36% 28.20% 23.25% 25.42%
Adjusted ROE 109.12% 56.82% 53.84% 54.73% 58.53%
Return on Assets (ROA)
Reported ROA 20.98% 9.57% 11.47% 8.41% 9.59%
Adjusted ROA 26.83% 12.62% 14.22% 10.62% 12.18%

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).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Johnson & Johnson adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Johnson & Johnson adjusted financial leverage ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Johnson & Johnson adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Johnson & Johnson adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Johnson & Johnson, Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
As Reported
Selected Financial Data (US$ in millions)
Sales to customers 85,159 94,943 93,775 82,584 82,059
Total assets 167,558 187,378 182,018 174,894 157,728
Activity Ratio
Total asset turnover1 0.51 0.51 0.52 0.47 0.52
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Sales to customers 85,159 94,943 93,775 82,584 82,059
Adjusted total assets 131,000 142,147 146,772 138,501 124,089
Activity Ratio
Adjusted total asset turnover2 0.65 0.67 0.64 0.60 0.66

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 Total asset turnover = Sales to customers ÷ Total assets
= 85,159 ÷ 167,558 = 0.51

2 Adjusted total asset turnover = Sales to customers ÷ Adjusted total assets
= 85,159 ÷ 131,000 = 0.65

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Johnson & Johnson adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 167,558 187,378 182,018 174,894 157,728
Shareholders’ equity 68,774 76,804 74,023 63,278 59,471
Solvency Ratio
Financial leverage1 2.44 2.44 2.46 2.76 2.65
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 131,000 142,147 146,772 138,501 124,089
Adjusted shareholders’ equity 32,216 31,573 38,777 26,885 25,832
Solvency Ratio
Adjusted financial leverage2 4.07 4.50 3.79 5.15 4.80

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 Financial leverage = Total assets ÷ Shareholders’ equity
= 167,558 ÷ 68,774 = 2.44

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 131,000 ÷ 32,216 = 4.07

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Johnson & Johnson adjusted financial leverage ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings 35,153 17,941 20,878 14,714 15,119
Shareholders’ equity 68,774 76,804 74,023 63,278 59,471
Profitability Ratio
ROE1 51.11% 23.36% 28.20% 23.25% 25.42%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings 35,153 17,941 20,878 14,714 15,119
Adjusted shareholders’ equity 32,216 31,573 38,777 26,885 25,832
Profitability Ratio
Adjusted ROE2 109.12% 56.82% 53.84% 54.73% 58.53%

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 ROE = 100 × Net earnings ÷ Shareholders’ equity
= 100 × 35,153 ÷ 68,774 = 51.11%

2 Adjusted ROE = 100 × Net earnings ÷ Adjusted shareholders’ equity
= 100 × 35,153 ÷ 32,216 = 109.12%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Johnson & Johnson adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 29, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings 35,153 17,941 20,878 14,714 15,119
Total assets 167,558 187,378 182,018 174,894 157,728
Profitability Ratio
ROA1 20.98% 9.57% 11.47% 8.41% 9.59%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings 35,153 17,941 20,878 14,714 15,119
Adjusted total assets 131,000 142,147 146,772 138,501 124,089
Profitability Ratio
Adjusted ROA2 26.83% 12.62% 14.22% 10.62% 12.18%

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 ROA = 100 × Net earnings ÷ Total assets
= 100 × 35,153 ÷ 167,558 = 20.98%

2 Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 35,153 ÷ 131,000 = 26.83%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Johnson & Johnson adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.