Analysis of Property, Plant and Equipment
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- Statement of Comprehensive Income
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
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Property, Plant and Equipment Disclosure
Johnson & Johnson, balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2024-12-29), 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).
- Land and land improvements
- The value of land and land improvements demonstrates a steady decline over the five-year period, decreasing from US$882 million in 2020 to US$718 million in 2024. This consistent reduction suggests either disposals, impairments, or revaluations negatively impacting this asset class.
- Buildings and building equipment
- Buildings and building equipment values increased slightly from US$12,502 million in 2020 to a peak of US$12,989 million in 2022, followed by a gradual decrease to US$12,317 million by 2024. This indicates some level of asset impairment, disposals, or lower investment in building infrastructure after 2022.
- Machinery and equipment
- Machinery and equipment values rose gradually from US$29,104 million in 2020 to US$30,431 million in 2022 but then experienced a decline in 2023 to US$28,979 million, followed by a modest recovery to US$29,444 million in 2024. This pattern may reflect cyclical investment and depreciation effects within this asset category.
- Construction in progress
- Construction in progress shows a steady upward trend from US$4,316 million in 2020 to US$6,289 million in 2024, reflecting ongoing capital projects and investments in fixed assets under development. This increase highlights a focus on future capacity expansion or refurbishment activities.
- Property, plant and equipment, gross
- The gross property, plant, and equipment balance fluctuated modestly, rising from US$46,804 million in 2020 to a high of US$49,253 million in 2022, then declining to US$47,768 million in 2023 before a slight recovery to US$48,768 million in 2024. This indicates a mixed pattern of asset purchases tempered by retirements or impairments in the later years.
- Accumulated depreciation
- Accumulated depreciation consistently increased from -US$28,038 million in 2020 to -US$29,450 million in 2022, indicating ongoing depreciation charges. However, there is an unusual reduction in accumulated depreciation to -US$27,878 million in 2023, followed by a slight increase to -US$28,250 million in 2024. The reduction may suggest asset disposals or adjustments in depreciation methods.
- Property, plant and equipment, net
- The net property, plant, and equipment balance shows a gradual increase from US$18,766 million in 2020 to US$20,518 million in 2024. The net increase despite fluctuations in gross assets and accumulated depreciation implies sustained investment in capital assets, partially offset by depreciation and disposals.
Asset Age Ratios (Summary)
Johnson & Johnson, asset age ratios
Based on: 10-K (reporting date: 2024-12-29), 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).
The analysis of the annual property, plant, and equipment data reveals several notable trends over the five-year period ending in 2024.
- Average Age Ratio (%)
- The average age ratio shows a gradual decline from 61.06% in 2020 to 58.79% in 2024. This steady decrease suggests a slight reduction in the relative age of the assets compared to their total useful life, indicating ongoing asset renewal or replacement efforts.
- Estimated Total Useful Life (in years)
- The total useful life fluctuates slightly, moving from 18 years in 2020 to 17 years in both 2021 and 2024, with an 18-year span in the intervening years. This minor variability may reflect adjustments in the asset management policies or recalibrations based on asset condition assessments.
- Estimated Age, Time Elapsed Since Purchase (in years)
- The estimated age remains consistent at 11 years from 2020 through 2023, with a reduction to 10 years in 2024. This decrease could be indicative of asset disposals or acquisitions that have lowered the average asset age, potentially improving overall asset efficiency.
- Estimated Remaining Life (in years)
- The estimated remaining life remains unchanged at 7 years throughout the entire period, suggesting a stable assessment of how long the assets are expected to remain in service. This stability implies consistent maintenance or replacement planning aligned with asset longevity expectations.
Overall, the data reflects a cautious but consistent approach to managing property, plant, and equipment, balancing asset aging with periodic renewals and stable life expectancy estimates.
Average Age
Based on: 10-K (reporting date: 2024-12-29), 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).
2024 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land and land improvements)
= 100 × ÷ ( – ) =
The data for property, plant, and equipment over the five-year period indicates several important trends in the company's asset base and depreciation patterns.
- Property, plant and equipment, gross
- The gross value of property, plant, and equipment showed a general upward trend from 46,804 million US dollars in 2020 to a peak of 49,253 million US dollars in 2022. However, this value declined in 2023 to 47,776 million US dollars before slightly recovering to 48,768 million US dollars in 2024. This suggests that the company made substantial additions to its fixed assets through 2022, followed by some reductions or disposals in 2023, with a mild rebound in investment in 2024.
- Accumulated depreciation
- The accumulated depreciation remained relatively stable overall, increasing slightly from 28,038 million US dollars in 2020 to 29,450 million US dollars in 2022. Interestingly, there was a decrease to 27,878 million US dollars in 2023 before a slight increase again to 28,250 million US dollars in 2024. The dip in accumulated depreciation in 2023 could indicate disposals of older assets or changes in depreciation policies or estimates.
- Land and land improvements
- The value of land and land improvements steadily decreased from 882 million US dollars in 2020 to 718 million US dollars in 2024. This represents a consistent reduction over the period, potentially reflecting asset sales or write-downs relating to land holdings.
- Average age ratio
- The average age ratio of the property, plant, and equipment decreased gradually from 61.06% in 2020 to 58.79% in 2024. A declining average age ratio suggests that the asset base is becoming relatively younger, which may be due to recent investments in newer assets or the disposal of older ones.
Overall, the data suggests that the company has generally invested in increasing or renewing its property, plant, and equipment assets through 2022, with some reduction in gross asset values and accumulated depreciation in 2023, followed by moderate recovery in 2024. The steady decline in land value contrasts with the slower depreciation trends and may indicate strategic asset management decisions. The decreasing average age ratio supports the interpretation of a progressively modernized asset base.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2024-12-29), 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).
2024 Calculations
1 Estimated total useful life = (Property, plant and equipment, gross – Land and land improvements) ÷ Depreciation expense, including amortization of capitalized interest
= ( – ) ÷ =
The analysis of the property, plant, and equipment (PP&E) figures over the five-year period reveals several noteworthy trends.
- Gross Property, Plant, and Equipment
- The gross value of property, plant, and equipment initially increased from 46,804 million US dollars in 2020 to a peak of 49,253 million in 2022. However, this was followed by a decline to 47,776 million in 2023, with a slight recovery to 48,768 million in 2024. Overall, the data indicate a growth trend through 2022, then a modest contraction and stabilization thereafter.
- Land and Land Improvements
- The value of land and land improvements demonstrated a continuous downward trend throughout the period. Starting at 882 million US dollars in 2020, the value steadily decreased each year, reaching 718 million in 2024. This consistent decline suggests divestment, revaluation, or impairment impacting land-related assets.
- Depreciation Expense, Including Amortization of Capitalized Interest
- The depreciation expense showed a relatively stable pattern, with a modest increase from 2,600 million US dollars in 2020 to 2,700 million in both 2021 and 2022. A slight reduction to 2,600 million occurred in 2023, followed by an increase to 2,800 million in 2024. This fluctuation may reflect changes in asset base, useful life estimates, or capital expenditure strategies.
- Estimated Total Useful Life
- The estimated total useful life of the assets displayed minor variances, changing between 17 and 18 years during the period. This suggests a relatively stable depreciation policy, with only slight adjustments potentially related to asset composition or accounting reassessments.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2024-12-29), 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).
2024 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense, including amortization of capitalized interest
= ÷ =
- Accumulated Depreciation
- The accumulated depreciation values show relative stability from 2020 to 2024, fluctuating slightly within the range of approximately 27,878 to 29,450 million US dollars. It peaked in 2022 at 29,450 million and then decreased to 27,878 million in 2023 before a minor increase to 28,250 million in 2024. This trend suggests that the total depreciation accumulated over the years has remained fairly constant with some minor adjustments, potentially indicative of asset disposals or changes in depreciation policies.
- Depreciation Expense
- The annual depreciation expense, including amortization of capitalized interest, exhibits moderate variation over the observed period. It increased slightly from 2,600 million US dollars in 2020 to 2,700 million in 2021 and remained steady at that level through 2022. A reduction occurred in 2023 to 2,600 million, followed by an increase to 2,800 million in 2024. This pattern may reflect changes in capital expenditure, asset acquisition timing, or shifts in depreciation methodology affecting periodic charges.
- Time Elapsed Since Purchase
- The time elapsed since purchase remained steady at 11 years four consecutive periods from 2020 through 2023, then decreased to 10 years in 2024. This suggests a change in the asset base composition, such as the disposal of older assets or acquisition of newer assets, which effectively lowered the average age of the property, plant, and equipment portfolio.
- Summary
- Overall, the data reveals a relatively stable asset depreciation profile over the five-year span, with minor fluctuations in accumulated depreciation and depreciation expense reflective of asset management activities. The decrease in average asset age in 2024 signals recent asset renewal or replacement, which may impact future depreciation expenses and the asset base's productive capacity. The consistent depreciation expenses highlight controlled and systematic asset cost allocation, supporting predictable financial planning.
Estimated Remaining Life
Based on: 10-K (reporting date: 2024-12-29), 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).
2024 Calculations
1 Estimated remaining life = (Property, plant and equipment, net – Land and land improvements) ÷ Depreciation expense, including amortization of capitalized interest
= ( – ) ÷ =
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment displayed a gradual upward trend over the five-year period. Beginning at $18,766 million at the end of 2020, the value increased steadily each year, reaching $20,518 million by the end of 2024. This consistent growth suggests ongoing investments or capital expenditures that have outpaced depreciation.
- Land and Land Improvements
- Contrary to the overall property, plant, and equipment trend, the value of land and land improvements demonstrated a declining pattern. Starting at $882 million in 2020, the value decreased gradually each year, dropping to $718 million by the end of 2024. This decline may indicate disposals, revaluations, or reclassifications of land assets during the period.
- Depreciation Expense, Including Amortization of Capitalized Interest
- The depreciation expense remained relatively stable over the five years, hovering between $2,600 million and $2,800 million. It increased slightly from $2,600 million in 2020 to $2,700 million in 2021 and 2022, then dropped back to $2,600 million in 2023 before rising again to $2,800 million in 2024. This stability in depreciation expense aligns with a consistent rate of asset consumption or aging.
- Estimated Remaining Life
- The estimated remaining life of the assets consistently stayed at 7 years throughout the analyzed period. This steadiness suggests that the company maintained a consistent estimation methodology or asset mix regarding the remaining useful life of its property, plant, and equipment.