Johnson & Johnson (NYSE:JNJ)

Net Fixed Asset Turnover

The net fixed asset turnover ratio exhibited an overall declining trend over the periods observed. It started at 4.59 and increased to peak values around 5.29 mid-2022, indicating improving utilization of fixed assets in generating sales. However, from late 2022 onwards, the ratio showed a consistent decline, falling to approximately 4.13 by the third quarter of 2025. This suggests a decrease in efficiency in using fixed assets for revenue generation during the latter periods.

Total Asset Turnover

The total asset turnover ratio demonstrated a mild upward trend from 0.49 to a peak of 0.55 around the third quarter of 2022, reflecting enhanced overall asset utilization to generate sales. Following this peak, the ratio experienced volatility and a general downward movement, declining to around 0.47-0.48 in the more recent quarters through 2025. This pattern points to a slight reduction in the efficiency of using total assets to drive revenue after mid-2022.

Equity Turnover

Equity turnover ratios were relatively stable with minor fluctuations. Starting at 1.28, the ratio oscillated narrowly between approximately 1.14 and 1.30 throughout the periods. Notably, there was a slight downward trend beginning in mid-2022, reaching a low near 1.14 by mid-2025 before a marginal increase towards 1.16. This indicates modest variability in how effectively shareholder equity was being employed to generate sales but no significant improvement or deterioration in equity efficiency overall.

Summary Insights

Asset efficiency metrics peaked around mid-2022, with both fixed and total asset turnover ratios reaching their highest points. Subsequently, these ratios declined, indicating a weakening in the company’s ability to generate revenue from its asset base. Equity turnover remained more stable, but with a subtle downward drift, suggesting steady but slightly diminishing effectiveness in utilizing equity. The observed trends may reflect changes in asset investment strategies, operational efficiency challenges, or shifts in sales performance impacting asset utilization over the analyzed timeframe.

The analysis of the quarterly financial data reveals several important trends and shifts in key performance indicators over the observed periods.

Sales to Customers

Sales figures demonstrate variability with an initial upward trend through 2021, peaking in the fourth quarter of that year. A decline occurs in early 2023, followed by a period of relative stabilization and modest growth toward mid-2025. Despite fluctuations, sales exhibit resilience by recovering after dips and maintaining levels broadly consistent with those seen in the earlier periods.

Property, Plant and Equipment, Net

The net value of property, plant, and equipment shows moderate fluctuations across the quarters. After a slight decrease during 2021 and early 2022, an increase is evident starting in late 2022 through to mid-2025. This upward trend suggests continued investment or reduced asset disposals, contributing to an overall expansion of the fixed asset base in recent periods.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio, which measures efficiency in using fixed assets to generate sales, experienced an initial increase through 2021 and into mid-2022, reaching a peak before declining substantially in late 2022 and early 2023. This decline corresponds with the period when sales decreased and fixed assets increased, indicating less efficient asset utilization. The ratio stabilizes at a lower level from 2023 onwards, reflecting a new efficiency baseline that is below the earlier peak levels.

Overall, the data suggest a period of growth and improved asset efficiency until mid-2022, followed by challenges that impacted sales and asset use efficiency. In response, fixed asset investments were increased, while sales growth struggled to maintain momentum. The stabilization of key indicators in more recent quarters may point to a phase of adjustment and recalibration in operational performance.

Sales to Customers

Sales exhibited a general fluctuation across the reported periods. Initially, there was a steady increase from 22,321 million to 24,804 million by the end of 2021. This was followed by a slight decline and stabilization around 23,700 million during most of 2022. Starting in early 2023, sales decreased notably to approximately 20,894 million but subsequently showed a gradual recovery, reaching around 23,993 million by the third quarter of 2025.

Total Assets

Total assets displayed an overall upward trend from 172,557 million in early 2021 to a peak near 195,969 million by April 2023. Thereafter, assets experienced a significant reduction with a notable dip to about 166,061 million in October 2023, followed by a recovery phase that brought total assets back to roughly 193,389 million by mid-2025, indicating some volatility in asset holdings.

Total Asset Turnover Ratio

The asset turnover ratio saw modest variation throughout the time horizon. The ratio started at 0.49 and increased to a peak near 0.55 by late 2022, suggesting improved efficiency in asset use to generate sales during this period. Subsequently, there was a decline with the ratio falling to around 0.46-0.47 in 2025, which indicates a slight reduction in the efficiency of utilizing assets to support sales in the more recent periods.

Summary Insights

The combined analysis reveals that while sales experienced fluctuations with a dip followed by a recovery, total assets showed more pronounced volatility with a sharp drop and subsequent rebound. The asset turnover ratio's peak around late 2022 reflects a period of enhanced operational efficiency, which later diminished moderately. This pattern suggests cyclical challenges affecting asset management and sales generation, with overall resilience observed through recovery phases by mid-2025.

Sales to Customers

The sales figures exhibit fluctuations over the reported periods. Starting from approximately $22.3 billion in April 2021, there is a general upward trend through the end of 2021, peaking near $24.8 billion in December 2021. However, sales decline in early 2023 to around $20.8 billion, followed by a moderate recovery and a leveling off in the latter part of 2023 and into 2024. Sales demonstrate some volatility with a slight upward movement towards the middle of 2024, reaching close to $22.5 billion, before increasing further and stabilizing near $24 billion by mid-2025. Overall, sales show variability with periods of growth interrupted by declines, but a recovery trend is apparent towards the end of the timeline.

Total Shareholders’ Equity

Total shareholders’ equity generally increases across the observed timeframe, starting from about $65.8 billion in early 2021 and rising steadily to exceed $74 billion by the end of 2021. Although there are some short-term decreases, such as the dip seen in late 2023 when equity falls below $69 billion, the trend remains upward with fluctuations. By mid-2025, shareholders’ equity surpasses $79 billion, indicating a strengthening capital base despite intermittent decreases. This suggests ongoing retention of earnings or capital raising activities supporting equity growth over time.

Equity Turnover Ratio

The equity turnover ratio, an efficiency metric indicating sales generated per unit of equity, shows a modest decreasing trend over the periods. Initially stable around 1.28 to 1.3 in 2021, the ratio dips gradually to approximately 1.2 in mid-2023 and fluctuates slightly thereafter. The ratio reaches a local low near 1.14 in mid-2025, before marginally rebounding to 1.16 at the final observation point. This suggests a gradual decline in efficiency with which equity is used to generate sales, implying either slower sales growth relative to equity increases or changes in asset utilization efficiency.

Summary

Over the reported quarters, sales to customers show variability with phases of increase and decline but trend towards recovery and stabilization near pre-decline levels by mid-2025. Shareholders’ equity grows persistently despite some downward fluctuations, reflecting a solid financial foundation. The equity turnover ratio experiences a subtle but steady decline, indicating that sales growth has not fully kept pace with the expansion in equity, which could point to evolving operational dynamics or changes in the capital structure affecting turnover efficiency. Overall, the data reflect a company maintaining financial growth with shifts in operational efficiency over time.