Johnson & Johnson (NYSE:JNJ)

Return on Assets (ROA)

The ROA shows an overall increasing trend from the available data starting in December 2020. Initially, the ROA rises from 8.41% to a peak around 20.85% in December 2023, demonstrating improved efficiency in asset utilization over this period. A notable fluctuation occurs with a peak at the end of 2023 and early 2024, reaching values above 20%. However, this is followed by a decline back to single-digit percentages around 8.24% in March 2025, before slightly recovering to 11.72% by June 2025. This pattern suggests periods of strong operational performance and subsequent contractions in asset profitability.

Financial Leverage

Financial leverage remains relatively stable across the periods, fluctuating modestly between approximately 2.33 and 2.77. The leverage slightly decreases from 2.76 in December 2020 to a low near 2.33 in October 2022, indicating a mild reduction in the use of debt relative to equity. Subsequently, it rises to 2.77 by April 2023 but tends to stabilize around 2.46 by mid-2025. Overall, the leverage remains moderate and consistent, implying a balanced approach to financing with no significant shifts in debt structure.

Return on Equity (ROE)

The ROE exhibits a pattern similar to ROA, with gradual increases from December 2020 through late 2023. It peaks markedly at an exceptionally high 54.95% in October 2024 before declining sharply to around 20.93% by March 2025. ROE values are generally high, indicating strong profitability relative to shareholders’ equity. The steep rise and subsequent fall within a short span suggest periods of enhanced profitability possibly driven by operational gains or financial leverage effects, followed by corrections or lower profitability in recent quarters.

Net Profit Margin

The net profit margin demonstrated a fluctuating trend over the observed periods. Starting from 17.82% in December 2020, it reached a peak of 44.92% in October 2023, showing a significant improvement in profitability during this time frame. However, after that peak, the margin sharply declined to 16.74% by March 2025 before showing a slight recovery, ending at 25% in June 2025. This pattern indicates pronounced volatility in profitability, suggesting varying operational efficiency or changes in cost management and revenue generation across quarters.

Asset Turnover

Asset turnover exhibited a relatively stable pattern with small fluctuations throughout the periods. Initially recorded at 0.47 in April 2021, it showed gradual improvement, peaking at 0.55 in December 2022. Subsequently, the ratio declined modestly to 0.46 by March 2025, before a minor increase to 0.47 in June 2025. The overall consistency in asset turnover suggests steady utilization of assets to generate sales, albeit with some small declines in efficiency towards the later periods.

Financial Leverage

Financial leverage ratios remained generally steady, with minor fluctuations between 2.33 and 2.77 across the periods observed. The leverage was highest at 2.77 in April 2023 and exhibited a decreasing trend thereafter, reaching 2.46 by June 2025. The pattern indicates a moderate use of debt financing with a slight reduction in reliance on leverage in the most recent periods, possibly reflecting a cautious financial policy or deleveraging efforts.

Return on Equity (ROE)

Return on equity followed a pattern broadly aligned with net profit margin but with more pronounced peaks and troughs. Starting near 23.25% in December 2020, ROE climbed steadily to an all-time high of 54.95% in October 2023, suggesting highly effective equity utilization during this phase. Nevertheless, it then declined sharply to 20.93% by March 2025 before slightly recovering to 28.88% in June 2025. This volatility suggests significant changes in profitability, asset efficiency, or leverage effects, indicating variable performance in shareholder returns over time.

The analysis of the quarterly financial data reveals several notable trends and fluctuations across key financial ratios over the observed periods.

Tax Burden

The tax burden ratio starts from 0.89 in December 2020 and generally exhibits a downward trend with some fluctuations. It peaks around 0.95 in mid to late 2023, before declining again to approximately 0.82-0.84 in early to mid-2025. This suggests some variability in the effective tax rate applied during these periods.

Interest Burden

This ratio remains relatively stable and close to 0.99 for much of the period from December 2020 through late 2022. Subsequently, a slight decline is observable, with values ranging from 0.96 to 0.98. This indicates consistent but marginally improved interest expense management or refinancing benefits over time.

EBIT Margin

The EBIT margin shows considerable volatility. Starting around 20-25% through 2020 and 2021, it dips sharply to approximately 16.75%–17.67% in early to mid-2023. Notably, an extraordinary increase occurs in late 2023 and early 2024 where the margin surges to over 40%, peaking near 49%. Following this spike, the margin drops back to around 20-31% through 2024 and mid-2025, reflecting significant variability in operating profitability or potential one-time events impacting earnings.

Asset Turnover

There is a modest upward trend in asset turnover from about 0.47 in late 2020 to a peak of 0.55 in late 2021. It then declines slightly, stabilizing near 0.46 to 0.51 in the subsequent quarters through mid-2025. This suggests relatively steady efficiency in utilizing assets to generate revenue, with some minor fluctuations.

Financial Leverage

The financial leverage ratio exhibits gradual variation, starting at 2.53 in early 2020, declining to about 2.33 in early 2023, then rising again closer to 2.77 in late 2023 before moderating to approximately 2.46 by mid-2025. The changes indicate relative stability with periods of slight increase and decrease in the extent of debt financing relative to equity.

Return on Equity (ROE)

ROE generally follows the pattern seen in EBIT margin, starting around 23% in late 2020 and showing moderate fluctuations around mid-20% through 2022. A significant spike occurs in late 2023 and early 2024, where ROE jumps dramatically to over 50%. This peak corresponds with the EBIT margin surge. Subsequently, ROE declines back to a range of approximately 20-29% in 2024 and mid-2025, indicating a return to more typical profitability levels.

Overall, the data suggests a period of remarkable profitability and operational performance in late 2023 to early 2024, as reflected by EBIT margin and ROE, accompanied by stable asset turnover and financial leverage levels. The tax and interest burdens remain relatively consistent with minor fluctuations. The sharp swings in profitability indicators may warrant further investigation into underlying causes such as extraordinary items, changes in business conditions, or accounting adjustments during that timeframe.

Net Profit Margin

The net profit margin exhibits significant fluctuations over the covered periods. Starting from a missing data point, it is recorded at 17.82% in December 2020 and gradually increases to a high of 44.92% in October 2023. This peak is followed by a subsequent decline to 16.74% by March 2025, before slightly rebounding to 25% by June 2025. Overall, the margin shows a strong upward trend reaching its maximum in late 2023, then experiencing volatility and a decreasing phase towards mid-2025.

Asset Turnover

Asset turnover maintains a relatively stable range throughout the timeline. After an initial observation of 0.47 in December 2020, it shows a modest increase to 0.55 by December 2021, indicating improved efficiency in using assets to generate sales. Subsequently, it slightly declines and fluctuates between 0.46 and 0.53 from early 2022 through mid-2025. This suggests that, while operational efficiency improved in late 2020 and 2021, it stabilized and slightly weakened towards the end of the observed period.

Return on Assets (ROA)

The return on assets demonstrates a pattern similar to that of net profit margin, reflecting profitability relative to asset base. Starting from 8.41% in December 2020, ROA rises to a peak of 22.37% in October 2023. After reaching this peak, it decreases markedly to around 8.24% by March 2025, followed by a slight improvement to 11.72% by June 2025. This pattern aligns with the fluctuations observed in net profit margin, indicating consistent changes in profitability and asset use efficiency.

Tax Burden

The tax burden ratio demonstrates a relatively stable pattern with slight fluctuations over the observed periods. Starting around 0.89 in early 2020, it gradually increased to a peak near 0.95 in the late 2022 and early 2023 quarters, indicating higher post-tax profitability. However, following this peak, there was a gradual decline to approximately 0.82-0.83 by mid to late 2025, suggesting a moderate increase in tax expenses relative to pre-tax earnings towards the end of the timeline.

Interest Burden

The interest burden ratio remains highly stable across the entire timeframe, consistently close to 0.99, with minor decreases to the mid 0.96 range during 2022 and onwards. This consistency suggests that interest expenses relative to earnings before interest and taxes remain minimal and steady, reflecting efficient debt management or low interest costs.

EBIT Margin

The EBIT margin exhibits notable variability and some pronounced spikes during the analyzed quarters. Initially ranging between 20% and low 24% in 2020 and 2021, it substantially increased in late 2023 and early 2024 reaching levels above 40%, peaking near 49%, before dropping again to around 20-31% in subsequent quarters. These fluctuations indicate periods of significantly enhanced operating profitability, possibly due to exceptional items or efficiency improvements, followed by normalization to more typical margins.

Asset Turnover

Asset turnover improved steadily from 0.47 in early 2020 to a peak of approximately 0.55 by late 2021, reflecting enhanced utilization of assets to generate sales. However, after this peak, the ratio gradually declined to about 0.46-0.49 towards mid to late 2025, implying a slight reduction in efficiency in asset usage over the latter periods.

Return on Assets (ROA)

ROA follows a pattern consistent with other profitability metrics, rising from around 8.4% in early 2020 to above 11% in 2021 and early 2022, then dipping to near 6.5-6.8% in late 2022. A significant surge occurs through 2023 and early 2024, with ROA reaching over 22%, paralleling the spike seen in EBIT margin. Subsequently, ROA declines once again to roughly 7.8-11.7% by mid to late 2025. This cyclical pattern underlines fluctuations in overall asset profitability, influenced by operating income volatility and asset utilization.

Tax Burden

The tax burden ratio shows a relatively stable pattern with slight fluctuations over the periods observed. After an initial ratio around 0.89, it generally decreased to about 0.82–0.84 in the most recent quarters, indicating a modest reduction in the proportion of earnings paid as tax. Notably, there was a peak reaching approximately 0.95 in late 2022 and early 2023 before declining again toward the end of the series.

Interest Burden

This ratio remained consistently close to 0.99 throughout most periods, demonstrating stable interest expenses relative to earnings before interest and taxes. There was a small dip towards 0.96–0.97 in several later quarters, suggesting a slight increase in interest expense burden in those periods, but overall, the metric indicates strong control over interest costs.

EBIT Margin

The EBIT margin exhibits notable variability across the time frame. Initially fluctuating between approximately 20% and 24%, there was a pronounced spike to over 40% in late 2022 and continuing through much of 2023. This reflects substantial operational profitability improvement during that interval. However, subsequent periods showed a return to mid-20% range, indicating a reversion to prior margin levels. The peak suggests either exceptional operational performance or one-time factors temporarily enhancing earnings before interest and taxes.

Net Profit Margin

Net profit margin mirrors the pattern seen in the EBIT margin, with relative stability in the 18–22% range initially, followed by a sharp increase to approximately 40–45% during late 2022 to early 2023. After this peak, margins decline again to around 15–25% in the most recent quarters. This significant margin expansion and contraction align with the fluctuations in EBIT margin, implying that net profitability was strongly influenced by operational efficiency changes or exceptional items during the high-margin periods.