Stock Analysis on Net
Stock Analysis on Net

Johnson & Johnson (NYSE:JNJ)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Johnson & Johnson, decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2023 51.11% = 20.98% × 2.44
Dec 31, 2022 23.36% = 9.57% × 2.44
Dec 31, 2021 28.20% = 11.47% × 2.46
Dec 31, 2020 23.25% = 8.41% × 2.76
Dec 29, 2019 25.42% = 9.59% × 2.65

Based on: 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), 10-K (reporting date: 2019-12-29).

The primary reason for the increase in return on equity ratio (ROE) over 2023 year is the increase in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Johnson & Johnson, decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 51.11% = 41.28% × 0.51 × 2.44
Dec 31, 2022 23.36% = 18.90% × 0.51 × 2.44
Dec 31, 2021 28.20% = 22.26% × 0.52 × 2.46
Dec 31, 2020 23.25% = 17.82% × 0.47 × 2.76
Dec 29, 2019 25.42% = 18.42% × 0.52 × 2.65

Based on: 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), 10-K (reporting date: 2019-12-29).

The primary reason for the increase in return on equity ratio (ROE) over 2023 year is the increase in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Johnson & Johnson, decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 51.11% = 0.95 × 0.98 × 44.22% × 0.51 × 2.44
Dec 31, 2022 23.36% = 0.83 × 0.99 × 23.17% × 0.51 × 2.44
Dec 31, 2021 28.20% = 0.92 × 0.99 × 24.48% × 0.52 × 2.46
Dec 31, 2020 23.25% = 0.89 × 0.99 × 20.22% × 0.47 × 2.76
Dec 29, 2019 25.42% = 0.87 × 0.98 × 21.50% × 0.52 × 2.65

Based on: 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), 10-K (reporting date: 2019-12-29).

The primary reason for the increase in return on equity ratio (ROE) over 2023 year is the increase in operating profitability measured by EBIT margin ratio.

Two-Component Disaggregation of ROA

Johnson & Johnson, decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2023 20.98% = 41.28% × 0.51
Dec 31, 2022 9.57% = 18.90% × 0.51
Dec 31, 2021 11.47% = 22.26% × 0.52
Dec 31, 2020 8.41% = 17.82% × 0.47
Dec 29, 2019 9.59% = 18.42% × 0.52

Based on: 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), 10-K (reporting date: 2019-12-29).

The primary reason for the increase in return on assets ratio (ROA) over 2023 year is the increase in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Johnson & Johnson, decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2023 20.98% = 0.95 × 0.98 × 44.22% × 0.51
Dec 31, 2022 9.57% = 0.83 × 0.99 × 23.17% × 0.51
Dec 31, 2021 11.47% = 0.92 × 0.99 × 24.48% × 0.52
Dec 31, 2020 8.41% = 0.89 × 0.99 × 20.22% × 0.47
Dec 29, 2019 9.59% = 0.87 × 0.98 × 21.50% × 0.52

Based on: 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), 10-K (reporting date: 2019-12-29).

The primary reason for the increase in return on assets ratio (ROA) over 2023 year is the increase in operating profitability measured by EBIT margin ratio.

Disaggregation of Net Profit Margin

Johnson & Johnson, decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2023 41.28% = 0.95 × 0.98 × 44.22%
Dec 31, 2022 18.90% = 0.83 × 0.99 × 23.17%
Dec 31, 2021 22.26% = 0.92 × 0.99 × 24.48%
Dec 31, 2020 17.82% = 0.89 × 0.99 × 20.22%
Dec 29, 2019 18.42% = 0.87 × 0.98 × 21.50%

Based on: 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), 10-K (reporting date: 2019-12-29).

The primary reason for the increase in net profit margin ratio over 2023 year is the increase in operating profitability measured by EBIT margin ratio.