Stock Analysis on Net
Stock Analysis on Net

Johnson & Johnson (NYSE:JNJ)

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Common-Size Income Statement

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Johnson & Johnson, common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 29, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Sales to customers
Cost of products sold
Gross profit
Selling, marketing and administrative expenses
Research and development expense
In-process research and development impairments
Restructuring
Operating earnings
Interest income
Interest expense, net of portion capitalized
Other expense, net
Earnings before provision for taxes on income
Provision for taxes on income
Net earnings from continuing operations
Net earnings from discontinued operations, net of tax
Net earnings

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).

Cost of Products Sold
There is a noticeable improvement in the cost of products sold relative to sales, decreasing consistently from -34.42% in 2020 to -30.93% in 2024. This indicates better control over production costs or improved sourcing efficiency over the period.
Gross Profit
Gross profit as a percentage of sales has generally increased, moving from 65.58% in 2020 to 69.07% in 2024, reflecting enhanced profitability at the gross margin level, likely supported by the declining cost of goods sold ratio.
Selling, Marketing, and Administrative Expenses
These expenses have slightly decreased as a percentage of sales, from -26.74% in 2020 to around -25.75% in 2024, suggesting a gradual improvement in operational efficiency or cost management within these functions.
Research and Development Expense
Research and development costs have risen steadily from -14.72% in 2020 to -19.4% in 2024. This marks an increasing investment in innovation and product development, which may impact short-term profitability but potentially benefits long-term growth.
In-Process Research and Development Impairments
There is a reduction in impairments related to in-process research and development, decreasing from -0.22% in 2020 to -0.24% in 2024, with some fluctuation, indicating sporadic write-offs but generally low impact on overall expenses.
Restructuring Costs
Restructuring expenses are relatively stable and low, fluctuating between -0.3% and -0.26%, indicating minimal restructuring activities during the periods analyzed.
Operating Earnings
Operating earnings as a percentage of sales have remained stable, around the mid-20% range, with a slight decline from a peak of 24.95% in 2021 to 23.42% in 2024. This reflects steady operating performance despite increased R&D spending.
Interest Income and Interest Expense
Interest income has increased significantly from 0.13% in 2020 to 1.5% in 2024, suggesting improved returns on investments or cash balances. Conversely, net interest expense has increased in magnitude, reaching -0.85% in 2024, indicating higher debt costs or borrowings.
Other Expense, Net
Other expenses show significant volatility, with a notable increase in net expense in 2023 (-7.79%) and partial improvement in 2024 (-5.28%), suggesting the presence of irregular or extraordinary items impacting profitability.
Earnings Before Provision for Taxes on Income
Earnings before taxes declined from a high of 24.29% in 2021 to 18.79% in 2024, indicating pressures on profitability before taxes possibly due to increased other expenses and interest costs.
Provision for Taxes on Income
The tax provision has fluctuated but remains generally small relative to sales, ranging from around -2.16% to -2.95%, without a clear trend.
Net Earnings from Continuing Operations
Net earnings from continuing operations show a downward trend from 22.26% in 2021 to about 15.84% in 2024, reflecting the combined impact of increased R&D, other expenses, and stable operating margins.
Net Earnings
Net earnings exhibit significant variability, with a sharp peak in 2023 at 41.28%, driven by a one-time contribution from discontinued operations (25.63%), before returning to a lower level of 15.84% in 2024. Excluding this discontinuation impact, the profitability shows a generally declining pattern in recent years.