Microsoft Excel LibreOffice Calc

Johnson & Johnson (JNJ)


Long-term Debt and Solvency Analysis

Difficulty: Beginner


Ratios (Summary)

Johnson & Johnson, debt and solvency ratios

Microsoft Excel LibreOffice Calc
Dec 30, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 28, 2014
Debt to equity 0.51 0.57 0.39 0.28 0.27
Debt to capital 0.34 0.37 0.28 0.22 0.21
Interest coverage 18.91 19.92 28.28 35.78 39.58

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Johnson & Johnson’s debt-to-equity ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Johnson & Johnson’s debt-to-capital ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Johnson & Johnson’s interest coverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

Debt to Equity

Johnson & Johnson, debt to equity calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 30, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 28, 2014
Selected Financial Data (USD $ in millions)
Loans and notes payable 2,796  3,906  4,684  7,004  3,638 
Long-term debt, excluding current portion 27,684  30,675  22,442  12,857  15,122 
Total debt 30,480  34,581  27,126  19,861  18,760 
Shareholders’ equity 59,752  60,160  70,418  71,150  69,752 
Ratio
Debt to equity1 0.51 0.57 0.39 0.28 0.27
Benchmarks
Debt to Equity, Competitors
Abbott Laboratories 0.64 0.90 1.07 0.42 0.36
AbbVie Inc. 7.33 7.95 8.03 8.62
Allergan PLC 0.37 0.41 0.43 0.56 0.55
Amgen Inc. 2.71 1.40 1.16 1.12 1.19
Biogen Inc. 0.46 0.47 0.54 0.70 0.05
Bristol-Myers Squibb Co. 0.52 0.68 0.41 0.47 0.53
Celgene Corp. 3.29 2.29 2.17 2.41 1.05
Eli Lilly & Co. 1.30 1.18 0.74 0.55 0.52
Gilead Sciences Inc. 1.28 1.64 1.39 1.20 0.80
Merck & Co. Inc. 0.94 0.71 0.62 0.59 0.44
Pfizer Inc. 0.66 0.61 0.71 0.60 0.51
Regeneron Pharmaceuticals Inc. 0.08 0.11 0.11 0.10 0.18
Debt to Equity, Sector
Pharmaceuticals & Biotechnology 0.90 0.84 0.76 0.69 0.55
Debt to Equity, Industry
Health Care 0.82 0.81 0.76 0.70 0.55

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Debt to equity = Total debt ÷ Shareholders’ equity
= 30,480 ÷ 59,752 = 0.51

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Johnson & Johnson’s debt-to-equity ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Debt to Capital

Johnson & Johnson, debt to capital calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 30, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 28, 2014
Selected Financial Data (USD $ in millions)
Loans and notes payable 2,796  3,906  4,684  7,004  3,638 
Long-term debt, excluding current portion 27,684  30,675  22,442  12,857  15,122 
Total debt 30,480  34,581  27,126  19,861  18,760 
Shareholders’ equity 59,752  60,160  70,418  71,150  69,752 
Total capital 90,232  94,741  97,544  91,011  88,512 
Ratio
Debt to capital1 0.34 0.37 0.28 0.22 0.21
Benchmarks
Debt to Capital, Competitors
Abbott Laboratories 0.39 0.47 0.52 0.30 0.27
AbbVie Inc. 1.27 0.88 0.89 0.89 0.90
Allergan PLC 0.27 0.29 0.30 0.36 0.35
Amgen Inc. 0.73 0.58 0.54 0.53 0.54
Biogen Inc. 0.31 0.32 0.35 0.41 0.05
Bristol-Myers Squibb Co. 0.34 0.40 0.29 0.32 0.35
Celgene Corp. 0.77 0.70 0.68 0.71 0.51
Eli Lilly & Co. 0.57 0.54 0.42 0.35 0.34
Gilead Sciences Inc. 0.56 0.62 0.58 0.54 0.45
Merck & Co. Inc. 0.48 0.42 0.38 0.37 0.31
Pfizer Inc. 0.40 0.38 0.41 0.38 0.34
Regeneron Pharmaceuticals Inc. 0.07 0.10 0.10 0.09 0.15
Debt to Capital, Sector
Pharmaceuticals & Biotechnology 0.47 0.46 0.43 0.41 0.35
Debt to Capital, Industry
Health Care 0.45 0.45 0.43 0.41 0.36

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Debt to capital = Total debt ÷ Total capital
= 30,480 ÷ 90,232 = 0.34

Ratio Description The company
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Johnson & Johnson’s debt-to-capital ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Interest Coverage

Johnson & Johnson, interest coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 30, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 28, 2014
Selected Financial Data (USD $ in millions)
Net earnings 15,297  1,300  16,540  15,409  16,323 
Add: Income tax expense 2,702  16,373  3,263  3,787  4,240 
Add: Interest expense, net of portion capitalized 1,005  934  726  552  533 
Earnings before interest and tax (EBIT) 19,004  18,607  20,529  19,748  21,096 
Ratio
Interest coverage1 18.91 19.92 28.28 35.78 39.58
Benchmarks
Interest Coverage, Competitors
Abbott Laboratories 4.48 3.47 4.28 20.53 17.79
AbbVie Inc. 4.86 7.72 8.53 10.24 6.52
Allergan PLC -6.53 -8.48 -1.19 -2.71 -3.16
Amgen Inc. 7.86 8.36 8.27 8.29 6.21
Biogen Inc. 30.41 21.45 19.97 50.79 134.27
Bristol-Myers Squibb Co. 33.61 27.18 36.42 12.29 12.73
Celgene Corp. 7.52 9.26 5.74 7.51 14.22
Eli Lilly & Co. 14.95 10.77 19.22 18.31 21.16
Gilead Sciences Inc. 8.24 13.10 18.74 32.48 37.06
Merck & Co. Inc. 12.27 9.65 7.72 9.04 24.61
Pfizer Inc. 10.03 10.69 8.04 8.48 10.00
Regeneron Pharmaceuticals Inc. 91.55 83.75 185.82 87.03 21.76
Interest Coverage, Sector
Pharmaceuticals & Biotechnology 8.96 9.01 10.57 12.56 16.13
Interest Coverage, Industry
Health Care 8.71 8.71 9.62 11.68 15.13

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Interest coverage = EBIT ÷ Interest expense
= 19,004 ÷ 1,005 = 18.91

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Johnson & Johnson’s interest coverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018.