Johnson & Johnson (NYSE:JNJ)

Current assets exhibited a decline from 2021 to 2023, followed by a period of relative stabilization and slight increase through 2025. Adjusted current assets mirrored this pattern, though the magnitude of change differed in certain periods. A detailed examination of the trends is presented below.

Overall Trend

Reported current assets decreased from US$60,979 million in 2021 to US$53,495 million in 2023, representing a reduction of approximately 12.4%. A subsequent increase was observed in 2024, reaching US$55,893 million, and continued modestly to US$55,624 million in 2025. Adjusted current assets followed a similar trajectory, declining from US$61,209 million in 2021 to US$53,661 million in 2023, a decrease of roughly 12.1%. Adjusted current assets also increased in 2024 to US$56,060 million, and then slightly decreased to US$55,807 million in 2025.

Year-over-Year Changes

The largest year-over-year decrease in current assets occurred between 2021 and 2022, with a reduction of US$5,685 million. The decrease from 2022 to 2023 was smaller, at US$1,800 million. The increase from 2023 to 2024 was US$2,400 million, and the increase from 2024 to 2025 was minimal, at US$269 million. Adjusted current assets experienced a similar pattern of decline between 2021 and 2023, with a decrease of US$5,712 million. The increase from 2023 to 2024 was US$2,399 million, and the decrease from 2024 to 2025 was US$253 million.

Relationship between Reported and Adjusted Values

The difference between current assets and adjusted current assets remained relatively consistent throughout the period. Adjusted current assets consistently exceeded reported current assets by approximately US$230 to US$400 million each year. This suggests that the adjustments applied to current assets are systematic and do not represent substantial fluctuations in valuation or recognition.

In summary, both reported and adjusted current assets experienced a period of decline followed by stabilization and modest growth. The adjustments made to current assets appear to be consistent and do not significantly alter the overall trend.

Total assets exhibited volatility over the five-year period. Initially increasing from 2021 to 2022, they then decreased significantly in 2023 before recovering in subsequent years. Adjusted total assets mirrored this pattern, though the magnitude of change differed. A consistent pattern emerges where adjusted total assets are lower than reported total assets each year, suggesting the presence of items requiring adjustment.

Overall Trend in Total Assets

Total assets increased from US$182,018 million in 2021 to US$187,378 million in 2022, representing a growth of approximately 2.9%. A substantial decrease followed in 2023, with total assets falling to US$167,558 million. This represents a decline of roughly 10.5% from the prior year. A recovery was observed in 2024, with total assets reaching US$180,104 million, and continued into 2025, reaching US$199,210 million.

Overall Trend in Adjusted Total Assets

Adjusted total assets followed a similar trajectory to total assets. They rose from US$172,025 million in 2021 to US$178,458 million in 2022, a growth of approximately 3.7%. A significant decrease occurred in 2023, with adjusted total assets declining to US$158,445 million, a decrease of approximately 11.2% from 2022. Subsequent increases were noted in 2024 (US$169,810 million) and 2025 (US$192,519 million).

Difference Between Total and Adjusted Assets

The difference between total assets and adjusted total assets varied annually. In 2021, the difference was US$9,993 million. This difference widened to US$8,920 million in 2022. The gap increased further in 2023 to US$9,113 million, despite the overall decrease in asset values. In 2024, the difference was US$10,294 million, and in 2025 it was US$6,691 million. The consistent presence of a difference suggests ongoing adjustments are being made to the initially reported asset values.

The recovery in both total and adjusted assets in 2024 and 2025 indicates a potential stabilization or positive shift in the company’s asset base following the decline experienced in 2023. Further investigation into the nature of the adjustments would be necessary to understand the underlying drivers of these changes.

Total liabilities exhibited volatility over the five-year period. Initially increasing from 2021 to 2022, they then decreased significantly in 2023 before rising again in 2024 and 2025. Adjusted total liabilities mirrored this pattern, though the magnitude of change was consistently lower.

Overall Trend

From 2021 to 2025, total liabilities increased from US$107,995 million to US$117,666 million, representing a net increase of approximately 9.0%. However, this increase was not linear. The largest single-year increase occurred between 2024 and 2025 (8.3%), while the most substantial decrease was observed between 2022 and 2023 (-10.3%).

Year-over-Year Changes

Total liabilities increased by 2.4% from 2021 to 2022. A subsequent decrease of 10.3% was recorded from 2022 to 2023. From 2023 to 2024, total liabilities increased by 10.0%, and finally, a further increase of 8.3% was seen from 2024 to 2025.

Adjustments Impact

The difference between reported total liabilities and adjusted total liabilities remained relatively consistent across the observed period. The adjustments reduced the reported liabilities by approximately US$7.5 billion in 2021, US$6.4 billion in 2022, US$3.2 billion in 2023, US$2.4 billion in 2024, and US$6.8 billion in 2025. The decreasing magnitude of adjustments from 2021 to 2024, followed by an increase in 2025, suggests a potential shift in the nature or volume of items requiring adjustment.

The fluctuations in total liabilities, coupled with the consistent adjustments, warrant further investigation to understand the underlying drivers. The significant decrease in 2023 and subsequent increases in 2024 and 2025 require detailed analysis of the specific liability accounts contributing to these movements.

Shareholders’ equity exhibited fluctuations over the five-year period, while adjusted shareholders’ equity demonstrated a more consistent, albeit initially subdued, growth pattern. A comparison of the two figures reveals adjustments consistently reducing the reported equity value.

Overall Trend - Shareholders’ Equity

Shareholders’ equity increased from US$74,023 million in 2021 to US$76,804 million in 2022, representing a growth of approximately 3.8%. However, a significant decrease was observed in 2023, falling to US$68,774 million. A partial recovery occurred in 2024, reaching US$71,490 million, followed by a substantial increase to US$81,544 million in 2025.

Overall Trend - Adjusted Shareholders’ Equity

Adjusted shareholders’ equity showed a more moderate increase from US$71,517 million in 2021 to US$74,258 million in 2022, a growth of roughly 3.8%. A decline was also noted in 2023, reaching US$62,854 million. Growth remained limited in 2024, with a value of US$63,644 million, before experiencing a significant increase to US$81,644 million in 2025, mirroring the trend in total shareholders’ equity.

Adjustment Impact

The difference between shareholders’ equity and adjusted shareholders’ equity varied across the period. In 2021, the adjustment amounted to US$2,506 million. This difference widened to US$2,546 million in 2022. The adjustment increased substantially in 2023 to US$5,920 million, and remained high in 2024 at US$7,846 million. By 2025, the adjustment had decreased to just US$100 million, indicating a significantly reduced need for equity adjustments.

Growth Rates

The largest percentage increase in shareholders’ equity occurred between 2024 and 2025, at approximately 14.0%. Adjusted shareholders’ equity also experienced its largest increase over the same period, at approximately 28.3%. The decline in both equity measures was most pronounced between 2022 and 2023, with shareholders’ equity decreasing by approximately 10.7% and adjusted shareholders’ equity decreasing by approximately 15.4%.

The substantial increase in both shareholders’ equity and adjusted shareholders’ equity in 2025 suggests a positive shift in the company’s financial position. The diminishing adjustment amount in 2025 indicates that the factors necessitating prior adjustments may have been resolved or are no longer as significant.

Over the five-year period ending December 28, 2025, both reported and adjusted financial figures demonstrate notable fluctuations. Total reported debt increased from US$33,751 million in 2021 to US$39,659 million in 2022, then decreased to US$29,332 million in 2023, before rising again to US$36,634 million in 2024 and reaching US$47,933 million in 2025. Shareholders’ equity exhibited a similar pattern, moving from US$74,023 million in 2021 to US$76,804 million in 2022, declining to US$68,774 million in 2023, increasing to US$71,490 million in 2024, and finally reaching US$81,544 million in 2025. Consequently, total reported capital mirrored these trends.

Debt Levels

The adjusted total debt figures closely follow the trend of reported debt, with a similar increase in 2022, decrease in 2023, and subsequent increases in 2024 and 2025. The difference between reported and adjusted debt remains consistent at US$1,000 million across all years, suggesting a consistent adjustment methodology. The most substantial year-over-year increase in adjusted total debt occurred between 2024 and 2025, rising by US$11,500 million.

Equity Trends

Adjusted shareholders’ equity also mirrors the reported equity trends, though the magnitude of change differs. The difference between reported and adjusted shareholders’ equity varies, starting at US$2,506 million in 2021 and fluctuating over the period. A significant decrease in adjusted shareholders’ equity is observed between 2022 and 2023, dropping by US$1,996 million. The adjusted equity shows a smaller increase between 2024 and 2025 compared to the reported equity, increasing by US$7,846 million versus US$10,054 million.

Capital Structure

Adjusted total capital generally follows the trends of both adjusted debt and adjusted equity. The difference between reported and adjusted total capital remains consistent at US$1,486 million across all years. The largest year-over-year increase in adjusted total capital occurred between 2024 and 2025, increasing by US$29,500 million. This increase is primarily driven by the increase in adjusted total debt.

In summary, the capitalization structure experienced volatility throughout the period. While both reported and adjusted figures show similar directional movements, the adjustments consistently impact the equity portion more significantly than the debt portion. The substantial increases observed in both debt and capital between 2024 and 2025 warrant further investigation to understand the underlying drivers of these changes.

Reported net earnings exhibited considerable fluctuation over the five-year period. Initial values decreased from 2021 to 2022, followed by a substantial increase in 2023, a significant decline in 2024, and a partial recovery in 2025. Adjusted net earnings mirrored this volatility, though the magnitudes of change differed. A notable divergence between reported and adjusted net earnings is apparent, particularly in 2023 and 2024.

Net Earnings Trend

Net earnings began at US$20,878 million in 2021, decreased to US$17,941 million in 2022, then rose sharply to US$35,153 million in 2023. This was followed by a substantial decrease to US$14,066 million in 2024, and a subsequent increase to US$26,804 million in 2025. The 2023 peak represents the highest value within the observed period, while the 2024 value is the lowest.

Adjusted Net Earnings Trend

Adjusted net earnings started at US$20,920 million in 2021, decreased to US$16,342 million in 2022, and then experienced a dramatic decline to US$4,523 million in 2023. A considerable increase was observed in 2024, reaching US$12,670 million, followed by a further increase to US$25,169 million in 2025.

Relationship Between Reported and Adjusted Net Earnings

In 2021 and 2022, the difference between reported and adjusted net earnings was relatively small, approximately US$42 million and US$1,599 million respectively. However, in 2023, adjusted net earnings were significantly lower than reported net earnings, with a difference of US$30,630 million. This pattern reversed somewhat in 2024, where adjusted net earnings exceeded reported net earnings by US$ -1,396 million. The difference narrowed again in 2025, with adjusted net earnings being US$1,635 million lower than reported net earnings. These variations suggest substantial adjustments were made to reported earnings in 2023 and 2024, impacting the overall profitability picture.

The considerable fluctuations in both reported and adjusted net earnings, coupled with the significant differences between the two figures in certain years, warrant further investigation into the nature of the adjustments being made. Understanding the specific items contributing to these adjustments is crucial for a comprehensive assessment of the company’s underlying financial performance.