Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Paying user area
Try for free
Johnson & Johnson pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
- Price to Book Value (P/BV) since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Johnson & Johnson for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Profitability Ratios (Summary)
Johnson & Johnson, profitability ratios
Based on: 10-K (reporting date: 2025-12-28), 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).
The profitability metrics demonstrate considerable fluctuation over the five-year period. While gross profit margin exhibits relative stability, operating and net profit margins, as well as returns on equity and assets, show more pronounced shifts, indicating changes in operational efficiency and capital utilization.
- Gross Profit Margin
- The gross profit margin remained relatively consistent, beginning at 68.16% in 2021, decreasing slightly to 67.26% in 2022, then increasing to 69.07% in 2024 before declining to 67.88% in 2025. This suggests a stable ability to manage production costs relative to revenue.
- Operating Profit Margin
- The operating profit margin experienced a slight decrease from 24.95% in 2021 to 24.63% in 2022, followed by a period of relative stability at 24.90% in 2023. A notable decline to 23.42% occurred in 2024, but this was followed by a substantial increase to 26.85% in 2025, suggesting improved operational control or a favorable shift in operating expenses in the latter year.
- Net Profit Margin
- The net profit margin displayed the most significant volatility. It decreased from 22.26% in 2021 to 18.90% in 2022, then surged dramatically to 41.28% in 2023. This was followed by a substantial decrease to 15.84% in 2024 and a recovery to 28.46% in 2025. These fluctuations suggest the impact of non-operating items, such as gains or losses from investments, or significant changes in tax rates.
- Return on Equity (ROE)
- ROE mirrored the trend in net profit margin, starting at 28.20% in 2021, decreasing to 23.36% in 2022, and then increasing sharply to 51.11% in 2023. A significant drop to 19.68% occurred in 2024, followed by a recovery to 32.87% in 2025. This indicates a strong correlation between profitability and shareholder equity utilization.
- Return on Assets (ROA)
- ROA followed a similar pattern to ROE and net profit margin, beginning at 11.47% in 2021, decreasing to 9.57% in 2022, and increasing substantially to 20.98% in 2023. A decline to 7.81% in 2024 was observed, with a subsequent increase to 13.46% in 2025. This suggests changes in the efficiency with which assets are employed to generate profits.
In summary, the period was characterized by fluctuating profitability. The substantial increases in net profit margin, ROE, and ROA in 2023, followed by declines in 2024, warrant further investigation to understand the underlying drivers of these changes. The recovery observed in 2025 suggests a potential stabilization of performance.
Return on Sales
Return on Investment
Gross Profit Margin
Johnson & Johnson, gross profit margin calculation, comparison to benchmarks
| Dec 28, 2025 | Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| 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: 2025-12-28), 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).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Sales to customers
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited a relatively stable pattern over the five-year period, with some fluctuations. Gross profit demonstrated an initial decrease from 2021 to 2022, followed by a decline in 2023, a subsequent recovery in 2024, and a further increase in 2025. Sales to customers mirrored this pattern, decreasing in 2023 before recovering in 2024 and 2025.
- Gross Profit Margin Trend
- The gross profit margin began at 68.16% in 2021, decreasing slightly to 67.26% in 2022. A notable increase was observed in 2023, reaching 68.82%, and continued into 2024 with a margin of 69.07%. The most recent year, 2025, saw a slight decrease to 67.88%.
The relationship between gross profit and sales to customers suggests a consistent ability to maintain profitability as sales volumes change. The increase in gross profit margin in 2023 and 2024, despite a decrease in sales in 2023, indicates improved cost management or pricing strategies during those periods. The slight decline in the gross profit margin in 2025, concurrent with increased sales, warrants further investigation to determine if cost pressures are emerging.
- Gross Profit Analysis
- Gross profit decreased from US$63,920 million in 2021 to US$63,854 million in 2022. A more substantial decrease occurred in 2023, falling to US$58,606 million. However, gross profit recovered to US$61,350 million in 2024 and further increased to US$63,937 million in 2025, nearly matching the 2021 level.
Overall, the gross profit margin demonstrates resilience, maintaining a generally high level throughout the period. The fluctuations observed are likely influenced by a combination of sales volume and cost of goods sold factors, and the recent trends suggest a continued capacity to generate substantial gross profit.
Operating Profit Margin
Johnson & Johnson, operating profit margin calculation, comparison to benchmarks
| Dec 28, 2025 | Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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: 2025-12-28), 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).
1 2025 Calculation
Operating profit margin = 100 × Operating earnings ÷ Sales to customers
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited a generally stable pattern over the five-year period, with some fluctuation. Initial values were strong, followed by a slight dip, then a recovery and subsequent increase.
- Operating Profit Margin - Overall Trend
- The operating profit margin began at 24.95% in 2021, decreased slightly to 24.63% in 2022, and then recovered to 24.90% in 2023. A decrease was observed in 2024, with the margin falling to 23.42%. However, a significant increase occurred in 2025, reaching 26.85%.
- Relationship to Sales
- While operating earnings remained relatively consistent between 2021 and 2023, sales to customers increased modestly from US$93,775 million to US$94,943 million before decreasing to US$85,159 million in 2023. The subsequent increase in sales to US$88,821 million in 2024 did not prevent a decline in the operating profit margin. The substantial increase in operating profit margin in 2025 coincided with a notable increase in sales to customers, reaching US$94,193 million.
- Year-over-Year Changes
- The largest year-over-year decrease in operating profit margin occurred between 2023 and 2024, with a decline of 1.48 percentage points. Conversely, the most significant year-over-year increase was observed between 2024 and 2025, with an increase of 3.43 percentage points. The changes between 2021 and 2022, and 2022 and 2023 were relatively minor, at 0.32 and 0.27 percentage points respectively.
The 2025 result represents the highest operating profit margin observed during the analyzed period, suggesting improved operational efficiency or pricing power in that year. The fluctuation in the operating profit margin indicates a sensitivity to changes in both operating earnings and sales to customers.
Net Profit Margin
Johnson & Johnson, net profit margin calculation, comparison to benchmarks
| Dec 28, 2025 | Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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: 2025-12-28), 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).
1 2025 Calculation
Net profit margin = 100 × Net earnings ÷ Sales to customers
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited considerable fluctuation over the five-year period. Initial values demonstrated a strong profitability position, followed by a period of decline, a substantial increase, and then another decline before a partial recovery.
- Overall Trend
- The net profit margin began at 22.26% in 2021, decreased to 18.90% in 2022, and then experienced a significant surge to 41.28% in 2023. This was followed by a substantial decrease to 15.84% in 2024, and a subsequent increase to 28.46% in 2025. This pattern indicates volatility in the company’s ability to translate sales into profit.
- Year-over-Year Changes
- From 2021 to 2022, the net profit margin decreased by 3.36 percentage points, suggesting a potential rise in costs or a decline in pricing power. The period from 2022 to 2023 saw a dramatic increase of 22.38 percentage points, likely driven by a combination of increased revenue efficiency and cost management. The subsequent drop of 25.44 percentage points from 2023 to 2024 represents a significant reversal of profitability. Finally, a recovery of 12.62 percentage points occurred between 2024 and 2025.
- Relationship to Sales
- While sales to customers remained relatively stable between 2021 and 2023, with a slight decrease in 2023, the net profit margin’s fluctuations were not directly correlated with sales volume. The largest increase in net profit margin occurred during a period of declining sales, indicating that factors beyond revenue generation were primarily responsible for the change. The increase in sales in 2025 coincided with an increase in net profit margin, suggesting a more positive relationship in the most recent period.
The considerable swings in net profit margin warrant further investigation into the underlying drivers of these changes, including cost of goods sold, operating expenses, and any non-recurring items impacting net earnings. The volatility suggests potential sensitivity to external factors or internal operational shifts.
Return on Equity (ROE)
Johnson & Johnson, ROE calculation, comparison to benchmarks
| Dec 28, 2025 | Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| 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: 2025-12-28), 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).
1 2025 Calculation
ROE = 100 × Net earnings ÷ Shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The return on equity (ROE) exhibited considerable fluctuation over the five-year period. Initial values demonstrated a strong performance, followed by a period of decline and subsequent recovery, ultimately concluding with a substantial increase.
- Overall Trend
- The ROE began at 28.20% in 2021, decreased to 23.36% in 2022, experienced a significant surge to 51.11% in 2023, then declined sharply to 19.68% in 2024, and finally rebounded to 32.87% in 2025. This pattern indicates a volatile performance in generating returns from shareholder investments.
- Net Earnings Influence
- Net earnings experienced a decrease from US$20,878 million in 2021 to US$17,941 million in 2022, coinciding with the initial decline in ROE. A substantial increase in net earnings to US$35,153 million in 2023 directly correlated with the peak ROE value of 51.11%. The subsequent drop in net earnings to US$14,066 million in 2024 contributed to the ROE decline, while the increase to US$26,804 million in 2025 supported the ROE recovery.
- Shareholders’ Equity Influence
- Shareholders’ equity generally increased over the period, moving from US$74,023 million in 2021 to US$81,544 million in 2025. However, a decrease was observed between 2022 and 2023 (from US$76,804 million to US$68,774 million). The decrease in equity in 2023, coupled with the significant increase in net earnings, likely amplified the ROE increase during that year. The increase in equity in 2024 and 2025 partially offset the impact of net earnings on ROE.
- Comparative Analysis
- The ROE in 2023 was notably higher than in all other years, suggesting a period of exceptionally efficient use of shareholder equity. The ROE in 2024 was the lowest of the period, indicating a less effective utilization of equity during that year. The final year, 2025, showed a substantial improvement, bringing the ROE back to a level comparable to the earlier years of the period.
The observed fluctuations in ROE appear to be strongly linked to changes in net earnings, with shareholders’ equity playing a moderating role. Further investigation into the factors driving these earnings variations would be beneficial.
Return on Assets (ROA)
Johnson & Johnson, ROA calculation, comparison to benchmarks
| Dec 28, 2025 | Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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: 2025-12-28), 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).
1 2025 Calculation
ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited considerable fluctuation over the five-year period. Initial values demonstrated a generally positive performance, followed by a significant decline and subsequent recovery.
- Overall Trend
- The ROA began at 11.47% in 2021, decreased to 9.57% in 2022, then experienced a substantial increase to 20.98% in 2023. This was followed by a sharp decrease to 7.81% in 2024, and a partial recovery to 13.46% in 2025.
- Year-over-Year Changes
- From 2021 to 2022, the ROA decreased by approximately 1.90 percentage points. The most significant change occurred between 2022 and 2023, with an increase of 11.41 percentage points. A substantial decrease of 13.17 percentage points was observed from 2023 to 2024. Finally, the ROA increased by 5.65 percentage points from 2024 to 2025.
- Relationship to Net Earnings and Total Assets
- The fluctuations in ROA appear to correlate with changes in both net earnings and total assets. The increase in ROA in 2023 coincided with a significant rise in net earnings, despite a decrease in total assets. Conversely, the decline in ROA in 2024 was associated with a substantial decrease in net earnings, even with a slight increase in total assets. The 2025 ROA improvement aligns with a recovery in net earnings and a further increase in total assets.
The volatility in ROA suggests potential underlying factors impacting the company’s efficiency in utilizing its assets to generate profit. Further investigation into the drivers of net earnings and asset base changes is warranted to understand these fluctuations.