Financial Performance Analysis Report: Johnson & Johnson

This report provides an analysis of Johnson & Johnson's financial performance. It begins with a description of the company, focusing on its business segments. The report then delves into the analysis of liquidity and profitability, highlighting key financial ratios such as the current ratio, quick ratio, and debt ratio to assess short-term solvency and leverage. The profitability analysis evaluates the company's return on investment, return on assets, and return on shareholder's equity. The report concludes with a discussion on the internet as a widely used source for financial information, emphasizing its benefits in terms of accessibility and cost-effectiveness. References are provided to support the analysis.

Running head: ACCOUNTING
Accounting
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Name of the university
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Table of Contents
Description of company...................................................................................................................2
Liquidity and profitability................................................................................................................2
Internet as widely used source for financial information................................................................4
Reference.........................................................................................................................................5

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Description of company
Johnson and Johnson is the holding entity that is engaged in development, research, sales
and manufacture of products in health care segments. Consumer segment of the entity includes
the products those are used for oral care, baby care, beauty, women’s health, over the counter
pharmaceutical, and the wound care markets (Team, Directors & Governance, 2019).
Gaining knowledge of the industry as well as the business is an important aspect for
financial statements analysis as the industry type and business type have big influence on the
performance of any entity. Further, the industry analysis will assist in identifying the threats and
opportunities which in turn will identify the impact on financial performance (Robinson et al.,
2015)
Liquidity and profitability

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Liquidity – Looking into the short term liquidity of the entity it can be analyzed that the current
ratio as well as quick ratio both is more than 1 that is signifying that the company’s current assets
are sufficient to pay off the short term obligations. However, debt ratio of 60.93% is signifying
that the company is highly leveraged as major proportions of its assets are financed through
borrowing (Team, Directors & Governance, 2019).

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Profitability – looking into the profitability position of the entity it can be identified that the
entity is able to generate 9.86% of return on its investment, 12.25% return from the assets and
25.51% return on shareholder’s equity. Hence, it can be stated that the company is able to
generate profit to provide return to the shareholders and able to deploy its investment and assets
to generate profits (Team, Directors & Governance, 2019).
Internet as widely used source for financial information
Internet is widely used source for the financial information as the wide availability of the
information is the biggest benefit. Further, the internet helps to get the financial report of any
entity directly which is cost saving as well as time saving (Robinson et al., 2015)

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Reference
Robinson, T. R., Henry, E., Pirie, W. L., & Broihahn, M. A. (2015). International financial
statement analysis. John Wiley & Sons.
Team, M., Directors, B. and Governance, C. (2019). About Johnson & Johnson. [online] Content
Lab - U.S. Retrieved 6 May 2019, from https://www.jnj.com/about-jnj