Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
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Profitability Ratios (Summary)
Johnson & Johnson, profitability ratios
Based on: 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Gross Profit Margin
- The gross profit margin exhibited a generally positive trend over the analyzed periods, increasing from 65.58% in 2020 to 69.07% in 2024. Minor fluctuations were observed in 2022 where the margin slightly decreased to 67.26%, but the overall trajectory indicates improved efficiency in production or cost control.
- Operating Profit Margin
- The operating profit margin remained relatively stable across the years, fluctuating narrowly between 23.42% and 24.95%. The highest margin was recorded in 2021 at 24.95%, followed by small declines in subsequent years. This stability suggests consistent operational management, though a slight downward adjustment is visible in 2024.
- Net Profit Margin
- The net profit margin showed considerable variability, starting at 17.82% in 2020 and peaking dramatically at 41.28% in 2023 before declining to 15.84% in 2024. This volatility may reflect extraordinary gains or losses, changes in tax rates, or other non-operational factors impacting net profitability.
- Return on Equity (ROE)
- Return on equity demonstrated a pronounced fluctuation with an upward trend peaking at 51.11% in 2023, which indicates a significant increase in profitability generated from shareholders’ equity during that year. However, this was followed by a notable decrease to 19.68% in 2024. The variable ROE points to changes in net income or equity base over the period.
- Return on Assets (ROA)
- The return on assets followed a variable path similar to net profit margin and ROE, increasing from 8.41% in 2020 to a peak of 20.98% in 2023, but then falling to 7.81% in 2024. This pattern suggests fluctuations in asset utilization efficiency, with notably higher effectiveness in 2023.
Return on Sales
Return on Investment
Gross Profit Margin
Johnson & Johnson, gross profit margin calculation, comparison to benchmarks
| Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Sales to customers | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Sales to customers
= 100 × ÷ =
2 Click competitor name to see calculations.
- Sales to Customers
- The sales revenue exhibited an overall increasing trend from 2020 to 2024, rising from approximately US$ 82.6 billion in 2020 to about US$ 88.8 billion in 2024. There was a peak observed in 2022 at around US$ 94.9 billion, followed by a decline in 2023 to approximately US$ 85.2 billion before rebounding in 2024.
- Gross Profit
- Gross profit showed a pattern with fluctuations across the reported years. Starting at roughly US$ 54.2 billion in 2020, it increased significantly to approximately US$ 63.9 billion in 2021. A slight decrease occurred in 2022, with gross profit holding steady at about US$ 63.9 billion, followed by a more noticeable decline in 2023 to near US$ 58.6 billion. In 2024, gross profit again increased to around US$ 61.4 billion but did not reach levels seen in 2021 or 2022.
- Gross Profit Margin
- The gross profit margin consistently improved over the period studied. Beginning at 65.58% in 2020, the margin increased to 68.16% in 2021 and slightly decreased to 67.26% in 2022. Subsequently, it rose again in 2023 to 68.82%, reaching its highest value in 2024 at 69.07%, indicating an improvement in cost efficiency or pricing strategies relative to sales.
- Overall Analysis
- The data indicates that while sales figures fluctuated, gross profit margin exhibited overall improvement, suggesting enhanced profitability per unit of sales. Despite a decrease in both sales and gross profit in 2023 relative to previous years, gross profit margin increased, hinting at potential operational efficiencies or product mix adjustments. The rebound in both sales and gross profit in 2024, along with continued margin improvement, points to recovery and strengthened financial performance approaching or exceeding earlier years' levels.
Operating Profit Margin
Johnson & Johnson, operating profit margin calculation, comparison to benchmarks
| Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating earnings | ||||||
| Sales to customers | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Operating Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Operating earnings ÷ Sales to customers
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating Earnings
- Operating earnings increased from 19,486 million US dollars in 2020 to a peak of 23,395 million in 2021, maintaining a similar level in 2022 with 23,382 million. However, a decline occurred in the subsequent years, dropping to 21,207 million in 2023 and further to 20,804 million in 2024. This pattern indicates an initial growth phase followed by a downward trend over the last two periods.
- Sales to Customers
- Sales to customers showed a consistent growth trend from 82,584 million US dollars in 2020 to 94,943 million in 2022. Subsequently, sales declined sharply to 85,159 million in 2023 before recovering somewhat to 88,821 million in 2024. Overall, sales experienced volatility with a clear peak in 2022, followed by a notable dip and partial rebound.
- Operating Profit Margin
- The operating profit margin demonstrated relative stability with minor fluctuations over the period. It increased from 23.6% in 2020 to 24.95% in 2021, slightly decreased to 24.63% in 2022, then rose again to 24.9% in 2023 before declining to 23.42% in 2024. The margin remained within a narrow range around the mid-20% mark, indicating consistent profitability despite fluctuations in earnings and sales.
- Overall Analysis
- The data reveal a period of growth in both operating earnings and sales up to 2021-2022, followed by a period of contraction in 2023 and 2024. Although sales recovered slightly in 2024, operating earnings continued to decline. The operating profit margin stayed relatively stable throughout, suggesting that while revenue and earnings fluctuated, the underlying operational efficiency and cost management were fairly consistent. The decline in operating earnings despite partial sales recovery may indicate increased costs or changes in product mix, which merit further investigation.
Net Profit Margin
Johnson & Johnson, net profit margin calculation, comparison to benchmarks
| Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Sales to customers | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Net Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net earnings ÷ Sales to customers
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings
- Net earnings exhibited a notable increase from 14,714 million US dollars in 2020 to 20,878 million US dollars in 2021, representing strong growth. This was followed by a decline to 17,941 million in 2022. In 2023, net earnings surged significantly to 35,153 million US dollars, reaching the highest level within the observed period. However, in 2024, net earnings dropped sharply to 14,066 million US dollars, the lowest in the dataset since 2020.
- Sales to Customers
- Sales to customers experienced an upward trajectory from 82,584 million US dollars in 2020 to 93,775 million in 2021, and a slight further increase to 94,943 million in 2022. In contrast, sales declined to 85,159 million in 2023 before a modest recovery to 88,821 million in 2024. Overall, sales peaked in 2022 and fluctuated thereafter.
- Net Profit Margin
- The net profit margin showed a generally positive trend from 17.82% in 2020 to a peak of 22.26% in 2021, indicating improved profitability relative to sales. It then decreased to 18.9% in 2022. A remarkable spike was observed in 2023, with the margin reaching 41.28%, more than doubling the previous highest margin, signaling a significant increase in profitability or operational efficiency. This was followed by a steep decline to 15.84% in 2024, the lowest margin in the period assessed.
- Summary
- The analysis shows considerable volatility in net earnings and net profit margin across the five-year period. Sales experienced moderate growth until 2022, after which they declined and partially recovered. The extraordinary rise in net earnings and profit margin in 2023 contrasts sharply with the marked decreases in 2024. This suggests episodic factors influencing profitability, possibly related to one-time events or changes in operational conditions. The 2024 results indicate a return to lower profitability levels despite a slight recovery in sales.
Return on Equity (ROE)
Johnson & Johnson, ROE calculation, comparison to benchmarks
| Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Shareholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| ROE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| ROE, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net earnings ÷ Shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings
- Net earnings displayed notable fluctuations during the observed periods. Starting at $14,714 million in 2020, there was a significant increase to $20,878 million in 2021. However, earnings declined to $17,941 million in 2022, followed by a sharp rise to a peak of $35,153 million in 2023. In the most recent period, net earnings dropped substantially to $14,066 million, falling below the 2020 level. This demonstrates high variability in profitability over the years, with a dramatic peak in 2023.
- Shareholders’ Equity
- Shareholders’ equity showed an upward trend overall, beginning at $63,278 million in 2020 and increasing to $74,023 million in 2021, then marginally rising to $76,804 million in 2022. However, it fell to $68,774 million in 2023 before moderately recovering to $71,490 million in 2024. The general trend reflects growth in the company's net assets with some volatility in the later years.
- Return on Equity (ROE)
- The ROE percentage exhibited a mixed pattern. Starting at 23.25% in 2020, it increased to 28.2% in 2021. In 2022, the ROE slightly decreased to 23.36%. There was a remarkable surge to 51.11% in 2023, corresponding with the peak in net earnings for that year. However, in 2024, ROE declined sharply to 19.68%, the lowest value recorded in the dataset. This indicates significant variation in profitability relative to equity, with an exceptional performance in 2023.
- Summary
- The financial data reveals considerable variability in both profitability and equity metrics over the five-year span. Net earnings and ROE both peaked dramatically in 2023, suggesting an anomalously high return and income generation during that year. Shareholders' equity showed growth trends but with moderate fluctuations in the latter years. The sharp declines in net earnings and ROE in 2024 highlight potential challenges affecting profitability. Overall, the company experienced fluctuating financial performance with episodes of high returns followed by significant downturns.
Return on Assets (ROA)
Johnson & Johnson, ROA calculation, comparison to benchmarks
| Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| ROA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| ROA, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings
- Net earnings exhibited notable variability over the five-year period. Beginning at 14,714 million US dollars in 2020, earnings rose significantly to 20,878 million in 2021. This was followed by a decrease to 17,941 million in 2022. A substantial increase occurred in 2023, with net earnings reaching 35,153 million, the highest point in the period. However, in 2024, net earnings sharply declined to 14,066 million, falling below the levels of 2020.
- Total Assets
- Total assets showed a moderate upward trend from 174,894 million US dollars in 2020 to 187,378 million in 2022. In 2023, total assets decreased notably to 167,558 million but partially recovered in 2024, increasing to 180,104 million. Despite this recovery, total assets in 2024 remained below the peak levels observed in 2021 and 2022.
- Return on Assets (ROA)
- ROA followed a fluctuating pattern through the period under review. Starting at 8.41% in 2020, ROA increased to 11.47% in 2021, then declined to 9.57% in 2022. A significant improvement was observed in 2023, with ROA reaching 20.98%, reflecting enhanced profitability relative to assets. However, this was followed by a steep decline to 7.81% in 2024, the lowest point in the five-year span.
- Overall Observations
- The financial data reveals considerable volatility in earnings and profitability ratios. The sharp increase in both net earnings and ROA in 2023 suggests a period of exceptional performance, which was not sustained into 2024. Total assets generally increased over the period but showed a dip in 2023, aligning with the volatility seen in earnings and returns. The decline in net earnings and ROA in 2024 despite a partial recovery in total assets signals potential challenges in operational efficiency or market conditions impacting profitability.