The Financial Statement Analysis of Johnson and Johnson

Abstract

Johnson & Johnson is a group of companies that manufactures healthcare products, medical devices, and pharmaceuticals, and has a 100-year history of being a leader in the pharmaceutical industry. Johnson & Johnson has always had a good reputation, but the previous year Johnson & Johnson suffered a large amount of product recalls. The original company's products did not meet the quality requirements and the hygiene conditions of the manufacturing process were not up to scratch. As a result, Johnson & Johnson's reputation has suffered greatly and the company's overall earnings have been affected, in recent years, a global pandemic of Covid-19 has led to the announcement of another halt to Johnson & Johnson's vaccine production. This essay will therefore examine whether these turmoils that have hit Johnson & Johnson have had a negative impact on Johnson & Johnson's financial situation over the last five years by calculating and analyzing the company's financial ratio. Through the analysis of the data and financial ratios obtained, Johnson & Johnson's overall profits have been on the rise in recent years due to its excellent marketing and management strategies. It is a worthwhile company for investors to invest in. However, in the long run, if Johnson & Johnson does not find a way to address the damage to its reputation and improve the quality of its products to increase consumer trust in the brand, then the value of Johnson & Johnson will still be on a downward slope.