Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Johnson & Johnson (NYSE:JNJ)

Return on Capital (ROC)

Advanced level

Return on Invested Capital (ROIC)

Johnson & Johnson, ROIC calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 29, 2019 Dec 30, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 13,700  12,552  14,546  3,784  16,220 
Invested capital2 98,488  96,969  101,168  106,608  84,298 
Performance Ratio
ROIC3 13.91% 12.94% 14.38% 3.55% 19.24%
Benchmarks
ROIC, Competitors4
Abbott Laboratories 8.01% 6.47% 6.13% 0.03% 3.51%
AbbVie Inc. 4.49% 14.72% 15.25% 3.87% 11.87%
Amgen Inc. 20.35% 22.74% 37.39% 6.60% 27.25%
Bristol-Myers Squibb Co. -7.57% 3.06% 26.85% 13.23% 25.13%
Eli Lilly & Co. 25.89% 22.93% 14.16% -4.90% 13.83%
Gilead Sciences Inc. 1.26% 12.92% 18.88% 21.91% 72.54%
Illumina Inc. 12.08% 19.15% 19.42% 20.55% 15.77%
Merck & Co. Inc. 11.66% 18.52% 12.10% 0.69% 5.02%
Pfizer Inc. 5.87% 14.19% 11.81% -4.78% 6.18%
Regeneron Pharmaceuticals Inc. 44.87% 34.24% 37.16% 29.41% 22.47%
Vertex Pharmaceuticals Inc. 37.13% 27.57% 16.16% 0.62% 0.28%
Zoetis Inc. 14.94% 15.96% 15.59% 13.93% 10.88%

Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27).

1 NOPAT. See details »

2 Invested capital. See details »

3 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 13,700 ÷ 98,488 = 13.91%

4 Click competitor name to see calculations.

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. Johnson & Johnson’s ROIC deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level.

Decomposition of ROIC

Johnson & Johnson, decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2020 13.91% = 20.16% × 0.84 × 82.28%
Dec 29, 2019 12.94% = 21.00% × 0.85 × 72.83%
Dec 30, 2018 14.38% = 22.50% × 0.81 × 79.26%
Dec 31, 2017 3.55% = 23.33% × 0.72 × 21.22%
Dec 31, 2016 19.24% = 27.69% × 0.85 × 81.47%

Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27).

1 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »

The primary reason for the increase in return on invested capital (ROIC) over 2020 year is the decrease in effective cash tax rate (CTR).


Operating Profit Margin (OPM)

Johnson & Johnson, OPM calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 29, 2019 Dec 30, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 13,700  12,552  14,546  3,784  16,220 
Add: Cash operating taxes2 2,949  4,683  3,806  14,049  3,689 
Net operating profit before taxes (NOPBT) 16,649  17,235  18,352  17,833  19,909 
 
Sales to customers 82,584  82,059  81,581  76,450  71,890 
Profitability Ratio
OPM3 20.16% 21.00% 22.50% 23.33% 27.69%
Benchmarks
OPM, Competitors4
Abbott Laboratories 16.05% 14.97% 11.67% 11.07% 12.18%
AbbVie Inc. 13.66% 30.01% 19.46% 30.71% 34.32%
Amgen Inc. 38.71% 46.69% 50.23% 50.31% 48.00%
Bristol-Myers Squibb Co. -12.65% 21.63% 26.91% 26.03% 31.63%
Eli Lilly & Co. 30.98% 24.91% 15.94% 9.01% 15.95%
Gilead Sciences Inc. 10.83% 27.94% 41.05% 57.07% 60.31%
Illumina Inc. 19.37% 30.23% 27.22% 39.36% 24.75%
Merck & Co. Inc. 19.13% 26.21% 21.47% 17.70% 12.62%
Pfizer Inc. 19.53% 35.42% 23.50% 23.75% 18.27%
Regeneron Pharmaceuticals Inc. 46.12% 33.76% 38.20% 34.45% 31.23%
Vertex Pharmaceuticals Inc. 50.94% 33.47% 21.74% 2.78% 2.86%
Zoetis Inc. 32.90% 31.81% 32.17% 30.87% 25.67%

Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
OPM = 100 × NOPBT ÷ Sales to customers
= 100 × 16,649 ÷ 82,584 = 20.16%

4 Click competitor name to see calculations.

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. Johnson & Johnson’s OPM deteriorated from 2018 to 2019 and from 2019 to 2020.

Turnover of Capital (TO)

Johnson & Johnson, TO calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 29, 2019 Dec 30, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Sales to customers 82,584  82,059  81,581  76,450  71,890 
Invested capital1 98,488  96,969  101,168  106,608  84,298 
Efficiency Ratio
TO2 0.84 0.85 0.81 0.72 0.85
Benchmarks
TO, Competitors3
Abbott Laboratories 0.57 0.55 0.52 0.42 0.46
AbbVie Inc. 0.44 0.53 0.98 0.62 0.53
Amgen Inc. 0.63 0.59 0.89 0.90 0.68
Bristol-Myers Squibb Co. 0.47 0.26 1.19 1.26 1.10
Eli Lilly & Co. 1.00 1.04 0.95 1.02 0.93
Gilead Sciences Inc. 0.48 0.70 0.62 1.06 1.55
Illumina Inc. 0.66 0.71 0.84 0.77 0.83
Merck & Co. Inc. 0.84 0.87 0.86 0.81 0.75
Pfizer Inc. 0.40 0.43 0.53 0.51 0.43
Regeneron Pharmaceuticals Inc. 1.03 1.21 1.08 1.20 1.45
Vertex Pharmaceuticals Inc. 0.76 0.85 0.79 0.79 0.57
Zoetis Inc. 0.58 0.64 0.62 0.71 0.72

Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27).

1 Invested capital. See details »

2 2020 Calculation
TO = Sales to customers ÷ Invested capital
= 82,584 ÷ 98,488 = 0.84

3 Click competitor name to see calculations.

Efficiency ratio Description The company
TO The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. Johnson & Johnson’s TO improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Effective Cash Tax Rate (CTR)

Johnson & Johnson, CTR calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 29, 2019 Dec 30, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 13,700  12,552  14,546  3,784  16,220 
Add: Cash operating taxes2 2,949  4,683  3,806  14,049  3,689 
Net operating profit before taxes (NOPBT) 16,649  17,235  18,352  17,833  19,909 
Tax Rate
CTR3 17.72% 27.17% 20.74% 78.78% 18.53%
Benchmarks
CTR, Competitors4
Abbott Laboratories 12.92% 21.15% -1.36% 99.37% 37.12%
AbbVie Inc. 25.34% 7.43% 19.97% 79.78% 34.90%
Amgen Inc. 15.91% 17.97% 16.67% 85.49% 16.15%
Bristol-Myers Squibb Co. 45.70% 16.09% 59.53% 27.47%
Eli Lilly & Co. 16.37% 11.34% 6.98% 153.07% 6.91%
Gilead Sciences Inc. 76.01% 34.29% 25.67% 63.90% 22.60%
Illumina Inc. 5.55% 10.66% 14.61% 31.76% 23.65%
Merck & Co. Inc. 27.35% 19.04% 34.59% 95.19% 47.06%
Pfizer Inc. 25.53% 6.34% 4.78% 139.36% 21.23%
Regeneron Pharmaceuticals Inc. 5.71% 16.35% 10.01% 28.60% 50.27%
Vertex Pharmaceuticals Inc. 4.34% 3.62% 5.81% 72.05% 83.04%
Zoetis Inc. 21.37% 21.17% 22.25% 36.23% 41.44%

Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 2,949 ÷ 16,649 = 17.72%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Johnson & Johnson’s CTR increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.