Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Johnson & Johnson, long-term (investment) activity 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).
An examination of long-term activity ratios reveals generally declining trends across the observed period. These ratios suggest a decreasing efficiency in asset utilization over the years examined. The rate of decline appears to be accelerating in the most recent periods.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio decreased from 4.95 in 2021 to 4.07 in 2025. While fluctuations occurred between 2021 and 2023, the ratio has consistently declined over the entire period. The inclusion of operating lease right-of-use assets demonstrates a similar pattern, moving from 4.72 in 2021 to 3.85 in 2025. This suggests that the company is generating less revenue for each dollar invested in net fixed assets, even when considering operating leases.
- Total Asset Turnover
- The total asset turnover ratio exhibited a gradual decline from 0.52 in 2021 to 0.47 in 2025. This indicates a decreasing ability to generate sales from its total asset base. The rate of decline increased between 2023 and 2025, suggesting a potential worsening in overall asset efficiency.
- Equity Turnover
- The equity turnover ratio remained relatively stable between 2021 and 2024, at approximately 1.24. However, a noticeable decrease to 1.16 was observed in 2025. This suggests a reduced ability to generate revenue from shareholder equity in the most recent year, potentially indicating a less effective use of equity financing.
Collectively, these ratios point to a trend of diminishing returns on asset investments. Further investigation into the underlying causes of these declines, such as changes in sales, asset base, or operating lease arrangements, would be warranted.
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Net Fixed Asset Turnover
Johnson & Johnson, net fixed asset turnover 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) | ||||||
| Sales to customers | 94,193) | 88,821) | 85,159) | 94,943) | 93,775) | |
| Property, plant and equipment, net | 23,169) | 20,518) | 19,898) | 19,803) | 18,962) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 4.07 | 4.33 | 4.28 | 4.79 | 4.95 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | 10.87 | 10.97 | 10.89 | 11.76 | 11.00 | |
| Amgen Inc. | 4.44 | 4.89 | 4.53 | 4.57 | 4.69 | |
| Bristol-Myers Squibb Co. | 6.39 | 6.77 | 6.77 | 7.38 | 7.67 | |
| Danaher Corp. | 4.44 | 4.78 | 5.25 | 7.96 | 7.77 | |
| Eli Lilly & Co. | 2.64 | 2.63 | 2.64 | 2.81 | 3.15 | |
| Gilead Sciences Inc. | 5.16 | 5.28 | 5.07 | 4.93 | 5.27 | |
| Merck & Co. Inc. | 2.57 | 2.70 | 2.61 | 2.77 | 2.53 | |
| Pfizer Inc. | 3.24 | 3.46 | 3.14 | 6.22 | 5.52 | |
| Regeneron Pharmaceuticals Inc. | 2.80 | 3.09 | 3.16 | 3.23 | 4.62 | |
| Thermo Fisher Scientific Inc. | 4.22 | 4.61 | 4.54 | 4.84 | 4.71 | |
| Vertex Pharmaceuticals Inc. | 7.89 | 8.98 | 8.51 | 8.06 | 6.92 | |
| Net Fixed Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 3.92 | 4.18 | 4.12 | 4.98 | 4.98 | |
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | 7.09 | 7.29 | 7.22 | 7.88 | 7.74 | |
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 fixed asset turnover = Sales to customers ÷ Property, plant and equipment, net
= 94,193 ÷ 23,169 = 4.07
2 Click competitor name to see calculations.
The net fixed asset turnover ratio decreased over the five-year period examined. Initially, the ratio exhibited a slight decline from 4.95 in 2021 to 4.79 in 2022. A more pronounced decrease followed, with the ratio falling to 4.28 in 2023. A modest recovery to 4.33 occurred in 2024, but this was not sustained, as the ratio continued to decline to 4.07 in 2025.
- Sales to Customers
- Sales to customers remained relatively stable between 2021 and 2022, increasing slightly from US$93,775 million to US$94,943 million. A significant decrease was observed in 2023, with sales falling to US$85,159 million. Sales partially recovered in 2024, reaching US$88,821 million, and continued to increase in 2025 to US$94,193 million, exceeding the 2021 level.
- Property, Plant and Equipment, Net
- Property, plant, and equipment, net, demonstrated a consistent upward trend throughout the period. From US$18,962 million in 2021, net property, plant, and equipment increased to US$19,803 million in 2022 and US$19,898 million in 2023. The rate of increase accelerated in 2024 and 2025, reaching US$20,518 million and US$23,169 million, respectively.
- Net Fixed Asset Turnover
- The declining net fixed asset turnover ratio suggests a decreasing efficiency in utilizing fixed assets to generate sales. While sales experienced fluctuations, the consistent growth in net property, plant, and equipment contributed to this downward trend. The ratio’s decline indicates that a greater investment in fixed assets is required to achieve each dollar of sales revenue. The slight increase in the ratio from 2023 to 2024 did not reverse the overall negative trend, and the ratio continued to fall in 2025.
The combination of fluctuating sales and increasing net property, plant, and equipment suggests a potential need to evaluate capital expenditure strategies and asset utilization effectiveness.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Johnson & Johnson, net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 28, 2025 | Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales to customers | 94,193) | 88,821) | 85,159) | 94,943) | 93,775) | |
| Property, plant and equipment, net | 23,169) | 20,518) | 19,898) | 19,803) | 18,962) | |
| ROU asset pertaining to operating leases | 1,300) | 1,100) | 1,000) | 1,100) | 900) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 24,469) | 21,618) | 20,898) | 20,903) | 19,862) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 3.85 | 4.11 | 4.07 | 4.54 | 4.72 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| AbbVie Inc. | 9.61 | 9.62 | 9.47 | 10.24 | 9.57 | |
| Amgen Inc. | 4.13 | 4.51 | 4.08 | 4.13 | 4.23 | |
| Bristol-Myers Squibb Co. | 5.28 | 5.78 | 5.60 | 6.18 | 6.66 | |
| Danaher Corp. | 3.64 | 3.93 | 4.26 | 6.35 | 6.10 | |
| Eli Lilly & Co. | 2.51 | 2.48 | 2.45 | 2.63 | 2.93 | |
| Gilead Sciences Inc. | 4.71 | 4.83 | 4.57 | 4.51 | 4.77 | |
| Merck & Co. Inc. | 2.42 | 2.55 | 2.45 | 2.60 | 2.33 | |
| Pfizer Inc. | 2.91 | 3.08 | 2.72 | 5.25 | 4.64 | |
| Regeneron Pharmaceuticals Inc. | 2.67 | 2.95 | 3.11 | 3.17 | 4.52 | |
| Thermo Fisher Scientific Inc. | 3.71 | 3.97 | 3.89 | 4.13 | 3.98 | |
| Vertex Pharmaceuticals Inc. | 3.89 | 4.26 | 6.79 | 6.13 | 5.32 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 3.56 | 3.78 | 3.71 | 4.48 | 4.45 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | 6.33 | 6.46 | 6.36 | 6.90 | 6.75 | |
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 fixed asset turnover (including operating lease, right-of-use asset) = Sales to customers ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 94,193 ÷ 24,469 = 3.85
2 Click competitor name to see calculations.
The net fixed asset turnover ratio, calculated as sales to customers divided by property, plant, and equipment (including operating lease and right-of-use assets), demonstrates a declining trend over the five-year period. While sales experienced fluctuations, the growth in net fixed assets outpaced sales increases, contributing to the observed decrease in the ratio.
- Overall Trend
- A consistent downward trend is evident in the net fixed asset turnover ratio, moving from 4.72 in 2021 to 3.85 in 2025. This indicates a decreasing efficiency in generating sales from the company’s fixed asset base.
- Sales Performance
- Sales to customers initially increased from US$93,775 million in 2021 to US$94,943 million in 2022, but then decreased to US$85,159 million in 2023. A subsequent recovery was observed in 2024 (US$88,821 million) and continued into 2025 (US$94,193 million), though not fully recovering the 2022 peak.
- Fixed Asset Investment
- Property, plant, and equipment, net, consistently increased throughout the period, rising from US$19,862 million in 2021 to US$24,469 million in 2025. This growth in fixed assets, particularly in the later years, appears to be a primary driver of the declining turnover ratio.
- Ratio Fluctuations
- The most significant decrease in the net fixed asset turnover ratio occurred between 2021 and 2023, dropping from 4.72 to 4.07. While a slight increase was noted in 2024 (4.11), the ratio continued its downward trajectory in 2025, reaching 3.85. This suggests that the investments in fixed assets are not yet translating into proportional sales growth, or that the asset base is expanding at a rate faster than sales.
The combination of fluctuating sales and consistently increasing net fixed assets suggests a potential need to evaluate the efficiency of asset utilization and the return on investment in property, plant, and equipment. Further investigation into the reasons behind the asset growth and its impact on sales is warranted.
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Total Asset Turnover
Johnson & Johnson, total asset turnover calculation, comparison to benchmarks
| Dec 28, 2025 | Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales to customers | 94,193) | 88,821) | 85,159) | 94,943) | 93,775) | |
| Total assets | 199,210) | 180,104) | 167,558) | 187,378) | 182,018) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.47 | 0.49 | 0.51 | 0.51 | 0.52 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | 0.46 | 0.42 | 0.40 | 0.42 | 0.38 | |
| Amgen Inc. | 0.39 | 0.35 | 0.28 | 0.38 | 0.40 | |
| Bristol-Myers Squibb Co. | 0.54 | 0.52 | 0.47 | 0.48 | 0.42 | |
| Danaher Corp. | 0.29 | 0.31 | 0.28 | 0.37 | 0.35 | |
| Eli Lilly & Co. | 0.58 | 0.57 | 0.53 | 0.58 | 0.58 | |
| Gilead Sciences Inc. | 0.49 | 0.48 | 0.43 | 0.43 | 0.40 | |
| Merck & Co. Inc. | 0.47 | 0.55 | 0.56 | 0.54 | 0.46 | |
| Pfizer Inc. | 0.30 | 0.30 | 0.26 | 0.51 | 0.45 | |
| Regeneron Pharmaceuticals Inc. | 0.35 | 0.38 | 0.40 | 0.42 | 0.63 | |
| Thermo Fisher Scientific Inc. | 0.40 | 0.44 | 0.43 | 0.46 | 0.41 | |
| Vertex Pharmaceuticals Inc. | 0.47 | 0.49 | 0.43 | 0.49 | 0.56 | |
| Total Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.43 | 0.43 | 0.40 | 0.47 | 0.45 | |
| Total Asset Turnover, Industry | ||||||
| Health Care | 0.67 | 0.65 | 0.63 | 0.66 | 0.62 | |
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
Total asset turnover = Sales to customers ÷ Total assets
= 94,193 ÷ 199,210 = 0.47
2 Click competitor name to see calculations.
The total asset turnover ratio exhibits a consistent, albeit gradual, decline over the five-year period. This indicates a decreasing efficiency in generating sales revenue from the company’s asset base.
- Total Asset Turnover Trend
- The ratio began at 0.52 in 2021 and decreased to 0.47 in 2025. This represents a cumulative decrease of approximately 10%. The decline was not linear, with a more pronounced decrease observed between 2023 and 2025.
Sales to customers experienced a decrease in 2023, followed by subsequent increases in 2024 and 2025, but these increases were not sufficient to offset the decline in the ratio. This suggests that the growth in sales did not keep pace with the growth in total assets.
- Asset and Sales Relationship
- Total assets increased from US$182,018 million in 2021 to US$199,210 million in 2025, representing a growth of approximately 9.4%. While sales also increased overall, from US$93,775 million to US$94,193 million, the asset growth outpaced the sales growth, contributing to the observed decline in the total asset turnover ratio.
The consistent decrease in the total asset turnover ratio warrants further investigation. Potential contributing factors could include increased investment in less liquid assets, inefficiencies in asset utilization, or a shift in business strategy towards lower-margin products. A deeper analysis of the components of total assets and the drivers of sales is recommended.
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Equity Turnover
Johnson & Johnson, equity turnover calculation, comparison to benchmarks
| Dec 28, 2025 | Dec 29, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales to customers | 94,193) | 88,821) | 85,159) | 94,943) | 93,775) | |
| Shareholders’ equity | 81,544) | 71,490) | 68,774) | 76,804) | 74,023) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 1.16 | 1.24 | 1.24 | 1.24 | 1.27 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| AbbVie Inc. | — | 16.94 | 5.24 | 3.36 | 3.65 | |
| Amgen Inc. | 4.06 | 5.45 | 4.32 | 6.77 | 3.63 | |
| Bristol-Myers Squibb Co. | 2.61 | 2.96 | 1.53 | 1.49 | 1.29 | |
| Danaher Corp. | 0.47 | 0.48 | 0.45 | 0.63 | 0.65 | |
| Eli Lilly & Co. | 2.46 | 3.17 | 3.17 | 2.68 | 3.15 | |
| Gilead Sciences Inc. | 1.27 | 1.48 | 1.18 | 1.27 | 1.28 | |
| Merck & Co. Inc. | 1.24 | 1.39 | 1.60 | 1.29 | 1.28 | |
| Pfizer Inc. | 0.72 | 0.72 | 0.67 | 1.06 | 1.06 | |
| Regeneron Pharmaceuticals Inc. | 0.46 | 0.48 | 0.51 | 0.54 | 0.86 | |
| Thermo Fisher Scientific Inc. | 0.83 | 0.86 | 0.92 | 1.02 | 0.96 | |
| Vertex Pharmaceuticals Inc. | 0.64 | 0.67 | 0.56 | 0.64 | 0.75 | |
| Equity Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.24 | 1.27 | 1.15 | 1.24 | 1.27 | |
| Equity Turnover, Industry | ||||||
| Health Care | 1.82 | 1.78 | 1.69 | 1.69 | 1.67 | |
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
Equity turnover = Sales to customers ÷ Shareholders’ equity
= 94,193 ÷ 81,544 = 1.16
2 Click competitor name to see calculations.
The analysis reveals a generally stable, but slightly declining, equity turnover ratio over the five-year period. Sales to customers experienced fluctuations, while shareholders’ equity also demonstrated variability, influencing the overall equity turnover trend.
- Equity Turnover
- The equity turnover ratio, which measures how efficiently a company utilizes shareholders’ equity to generate sales, remained relatively consistent between 2021 and 2023, holding at approximately 1.24. A slight decrease to 1.27 in 2021 from 1.24 in 2022 was observed. The ratio remained at 1.24 in 2023. However, a further decline to 1.16 was noted in 2025. This suggests a gradual reduction in the efficiency with which equity is being used to generate revenue.
- Sales to Customers
- Sales to customers increased modestly from US$93,775 million in 2021 to US$94,943 million in 2022. A significant decrease to US$85,159 million occurred in 2023, followed by a partial recovery to US$88,821 million in 2024. Sales then increased substantially to US$94,193 million in 2025, exceeding the 2022 level. These fluctuations in sales contribute to the observed changes in equity turnover.
- Shareholders’ Equity
- Shareholders’ equity increased from US$74,023 million in 2021 to US$76,804 million in 2022. A decrease to US$68,774 million was recorded in 2023. Equity then rose to US$71,490 million in 2024, and further increased to US$81,544 million in 2025. The changes in equity, in conjunction with sales fluctuations, impacted the equity turnover ratio.
The decrease in equity turnover in 2025, despite increased sales, indicates that shareholders’ equity grew at a faster rate than sales during that year. This could be due to increased investments in assets or retained earnings, which, while potentially beneficial for long-term growth, temporarily reduce the efficiency of equity utilization as measured by this ratio.
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