Johnson & Johnson (NYSE:JNJ)

Return on Assets (ROA)

The Return on Assets exhibited significant fluctuations over the observed periods. Starting at 8.41% in 2020, ROA increased to a peak of 11.47% in 2021, followed by a decline to 9.57% in 2022. A notable increase occurred in 2023, reaching 20.98%, before dropping sharply to 7.81% in 2024. This pattern indicates variability in asset profitability, with 2023 representing an outlier year of exceptional performance.

Financial Leverage

Financial leverage showed a slight overall decrease from 2.76 in 2020 to 2.52 in 2024 after hitting a low of 2.44 in 2022 and 2023. This suggests a modest reduction in reliance on debt relative to equity over the period, stabilizing in the later years with minimal variation.

Return on Equity (ROE)

Return on Equity demonstrated considerable volatility, increasing from 23.25% in 2020 to 28.2% in 2021, then dropping to 23.36% in 2022. There was a sharp spike in 2023, reaching 51.11%, more than double previous years' results. However, this was followed by a decline to 19.68% in 2024. The ROE trend mirrors the ROA pattern, with a significant performance anomaly in 2023, which could be related to changes in operational efficiency or financial structure.

The financial data indicates variations in key performance ratios over the five-year period from the end of 2020 to the end of 2024. These changes reflect fluctuations in profitability, asset utilization, leverage, and shareholder returns.

Net Profit Margin

The net profit margin exhibited notable volatility throughout the period. It increased from 17.82% in 2020 to a peak of 22.26% in 2021, followed by a decrease to 18.9% in 2022. A significant rise occurred in 2023, reaching 41.28%, which is an unusually high figure compared to prior years. However, it then declined sharply to 15.84% in 2024, the lowest margin recorded in the five-year span. This pattern suggests considerable fluctuations in profitability, possibly due to external market conditions, cost management, or revenue dynamics.

Asset Turnover

The asset turnover ratio remained relatively stable over the years, with minor fluctuations. It started at 0.47 in 2020, improved slightly to 0.52 in 2021, and then hovered around 0.51 for the subsequent two years. A small decrease was noted in 2024 to 0.49. The consistency in this ratio indicates a stable efficiency in using assets to generate sales, though there was a slight reduction in the most recent year.

Financial Leverage

Financial leverage showed a decreasing trend from 2.76 in 2020 to 2.44 in 2022 and 2023, suggesting a gradual reduction in the use of debt relative to equity. In 2024, there was a minor increase to 2.52, indicating a slight rise in leverage but still below the initial 2020 level. This pattern may reflect cautious debt management and changes in capital structure.

Return on Equity (ROE)

The ROE trend parallels that of net profit margin, with significant fluctuations. The ratio increased from 23.25% in 2020 to 28.2% in 2021, then decreased to 23.36% in 2022. In 2023, a pronounced spike occurred, reaching 51.11%, more than doubling the previous year's figure. This surge likely reflects a combination of highly improved profitability and leverage effects. Nonetheless, ROE dropped markedly to 19.68% in 2024, indicating reduced efficiency in generating returns for shareholders compared to the previous year.

Overall, the data highlights a period of substantial variability, particularly in profitability and shareholder returns, while asset utilization remained steady and financial leverage displayed a mild declining trend with slight recent increase. The sharp rise and subsequent declines in net profit margin and ROE suggest the influence of extraordinary factors or irregular events affecting earnings in certain years.

Tax Burden

The tax burden ratio exhibited fluctuations across the observed periods. It increased from 0.89 in 2020 to a peak of 0.95 in 2023, indicating a temporary easing in tax liabilities relative to earnings before tax. However, it declined again to 0.84 in 2024, suggesting an increase in tax expenses or a change in tax strategy.

Interest Burden

The interest burden ratio remained relatively stable over the years, with values close to 1.00. There was a slight decline from 0.99 in the early years to 0.96 by the end of 2024, indicating a marginal increase in interest expenses relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin showed notable variability. Starting at 20.22% in 2020, it increased steadily to 24.48% in 2021 before declining moderately to 23.17% in 2022. A significant surge occurred in 2023, reaching 44.22%, more than doubling previous figures, which may reflect exceptional operational efficiency or one-time gains. This was followed by a substantial drop to 19.64% in 2024, returning close to the initial levels.

Asset Turnover

Asset turnover was relatively consistent, improving modestly from 0.47 in 2020 to a peak of 0.52 in 2021, then stabilizing around 0.50. A slight decrease to 0.49 was recorded in 2024, indicating a marginal reduction in the efficiency of asset use to generate sales.

Financial Leverage

Financial leverage showed a downward trend from 2.76 in 2020 to 2.44 in 2022 and 2023, suggesting a reduction in the use of debt financing. A slight increase to 2.52 in 2024 indicates a modest return towards higher leverage.

Return on Equity (ROE)

The ROE exhibited significant volatility. It increased from 23.25% in 2020 to a peak of 28.2% in 2021, then declined to 23.36% in 2022. In 2023, there was a dramatic rise to 51.11%, which aligns with the spike in EBIT margin, indicating extraordinarily high profitability relative to shareholders’ equity. This was followed by a marked drop to 19.68% in 2024, falling below initial values and suggesting decreased overall profitability.

Net Profit Margin

The net profit margin experienced significant fluctuations over the analyzed period. It started at 17.82% in 2020 and increased notably to 22.26% in 2021. However, in 2022, there was a decline to 18.9%, followed by a dramatic rise to 41.28% in 2023. In the most recent year, 2024, the margin dropped sharply to 15.84%. This volatility suggests variable profitability which may be influenced by changes in cost structure, pricing strategy, or extraordinary items affecting net income.

Asset Turnover

The asset turnover ratio showed relative stability across the time span. Beginning at 0.47 in 2020, it increased modestly to 0.52 in 2021, then slightly declined to 0.51 in both 2022 and 2023. In 2024, it decreased slightly further to 0.49. This stability indicates consistent efficiency in the utilization of assets to generate sales, with only minor variations over the years.

Return on Assets (ROA)

Return on assets mirrored the net profit margin trend but with more pronounced changes. ROA rose from 8.41% in 2020 to a peak of 11.47% in 2021, then dipped to 9.57% in 2022. It surged substantially to 20.98% in 2023 before falling back sharply to 7.81% in 2024. The pattern suggests that periods of higher profitability and efficient asset use were followed by years of reduced returns, potentially reflecting changes in operational effectiveness or asset base management.

Tax Burden

The tax burden ratio exhibited variability over the observed periods, beginning at 0.89 and peaking at 0.95 in 2023 before declining again to 0.84 in 2024. This indicates fluctuations in the proportion of pre-tax earnings retained after taxes, with a notable increase in 2023 followed by a reduction in 2024.

Interest Burden

The interest burden remained relatively stable, maintaining consistently high ratios close to 1.00 from 2020 through 2024. A minor decline to 0.96 was noted in the last period, suggesting slightly increased interest expenses relative to earnings before interest and taxes, but overall interest impact on earnings remained minimal.

EBIT Margin

The EBIT margin showed substantial fluctuations, rising significantly from 20.22% in 2020 to a peak of 44.22% in 2023, followed by a sharp decline to 19.64% in 2024. This volatility indicates variations in operational profitability, with 2023 being an outlier year of unusually high earnings relative to revenue.

Asset Turnover

Asset turnover remained steady, showing a modest increase from 0.47 in 2020 to a peak of 0.52 in 2021, then marginal decreases in subsequent years stabilizing around 0.49 in 2024. This suggests the efficiency in using assets to generate sales has been relatively constant with slight fluctuations.

Return on Assets (ROA)

Return on assets experienced notable variation, increasing from 8.41% in 2020 to 20.98% in 2023, and subsequently declining sharply to 7.81% in 2024. This pattern mirrors that of the EBIT margin, reflecting changes in profitability and asset utilization effectiveness over time, with 2023 being an exceptionally strong performance year.

Tax Burden

The tax burden ratio exhibits moderate fluctuations over the five-year period. It starts at 0.89 in 2020, increases to a peak of 0.95 in 2023, and subsequently declines to 0.84 in 2024. This indicates variability in the proportion of earnings retained after taxes, with the highest tax efficiency observed in 2023 followed by a decrease in the most recent year.

Interest Burden

The interest burden remains relatively stable throughout the period, hovering close to 0.99 from 2020 to 2022, then slightly decreasing to 0.96 by 2024. This suggests a consistently low interest expense impact on earnings, with a minor increase in interest costs impacting profit slightly over time.

EBIT Margin

The EBIT margin displays significant volatility. Starting at 20.22% in 2020, it rises notably to 24.48% in 2021, dips modestly in 2022, then surges sharply to 44.22% in 2023 before plunging to 19.64% in 2024. This pattern reflects large fluctuations in operating profitability, with an exceptional performance peak in 2023 followed by a considerable decline the next year.

Net Profit Margin

The net profit margin follows a similar volatile trend to the EBIT margin. It increases from 17.82% in 2020 to a peak of 22.26% in 2021, declines in 2022, then dramatically rises to 41.28% in 2023 before falling to 15.84% in 2024. This corresponds with the company's overall profitability after all expenses and taxes, highlighting a particularly strong bottom-line performance in 2023 that is not sustained into 2024.