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  • bb254 replied to the topic Discussion Topic: Exercise your research skills in the forum Business 101 7 years, 8 months ago

    I did some research on Johnson and Johnson, these were my findings:

    Gross Profit Margin (Quarterly)= .6909 as of June 30, 2017
    GPM is the ratio between how much money you make after you spend a certain amount in sales. The perfect situation is when this is equal to one, the fact that Johnson and Johnson is so close to one means they are in a great position. If the GMP was less than .2 the corporation would be spending way too much versus how much they are earning.

    Net Profit Margin (Quarterly)=0.2031 as of June 30,2017
    NPM is the percentage of money brought into the corporation as profit. This value has dropped 4% since March which is not a positive outlook because that means that Johnson and Johnson is not bringing as much profit as they were.

    Current Ratio (Quarterly)= 1.344 as of June 30,2017
    This is very good because it means that Johnson and Johnson has enough assets to pay off their debt. If the current ratio was below one then it would have meant that the corporation did not have enough assets to get out of debt.

    Return on Investment (Annual) =.1439 as of January 01,2017
    ROI show you how much the corporation has made vs the investments. An ROI less than 0.1 or 0.2 is technically not a good sign because it means the corporation is not making as much profit versus how much was invested in it.
    Therefore, I would conclude that Johnson and Johnson from a financial aspect is currently in a healthy financial state. However, the ratio of return on investment needs to increase above 20% .

    Reference:
    https://ycharts.com/companies/JNJ/gross_profit_margin
    https://ycharts.com/companies/JNJ/profit_margin
    https://ycharts.com/companies/JNJ/return_on_assets
    https://csimarket.com/stocks/JNJ-Annual-Return-on-Investment-ROI.html