Question

navigate to the website of Johnson & Johnson and locate the most recent annual reports. You will use the annual reports to create financial statements. These statements will become the reference statements for your case. Annual reports for JNJ can be found on the company’s website and are usually located in a section titled Investors/SEC filings.

Use the annual report to find the total current assets and total current liabilities.Compute the current ratio for JNJ for previous two fiscal yearsReview reports on data for the last two years.Net Cash Flows from Operating ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Financing ActivitiesCash and Cash Equivalents at the end of the YearsCreate a Balance Sheet or Statement of Cash Flows for most recent two yearsIdentify trends with an indication of if the financial statements show a positive or negative for the organization and investors.Use Microsoft Excel to create at least three (3) graphical displays to show the trends (i.e., bar graph, pivot table, histogram, etc). You should include a copy of your graphs in the body of your report.Discusses which year Johnson & Johnson appear to be in a stronger financial position and big differences between the 2 years (Keep in mind that dollar amounts in ( ) are negative or cash outflows).Imagine that this information represents information for your project case. Incorporate or reference financial information in your case to support the report.

Summarize your responses in a report using titles from the assignment requirements (i.e., assets and liabilities, cash flows/balance sheet, trends, financial position). This document will serve as your Financial Statements section of your project

Answer 1

JOHNSON & JOHNSON CALCULUATION OF CURRENT RATIO (Dollars in Millions) Description 2018 2017 $18,107 1,580 17,824 472 Current assets Cash and cash equivalents Marketable securities Accounts receivable trade, less allowances for doubtful accounts Inventories Prepaid expenses and other receivables Assets held for sle Total current assets 14,098 13,490 8,599 8,765 2,6992,537 950 - 46,033 43.088 Current liabilities Loans and notes payable Accounts payable Accrued liabilities Accrued rebates, returns and promotions Accrued compensation and employee related obligations Accrued taxes on income Total current liabilities $2,796 7,537 7,601 9,380 3,098 818 31,230 3,906 7,310 7,304 7,210 2.953 1,854 30,537 CURRENT RATIO - CURRENT ASSETS / CURRENT LIABILITIES 1.47 1.41

JOHNSON & JOHNSON Cash Flows Statement (Dollars in Millions) 2018 2017 $15,297 1,300 978 Cash flows from operating activities Net earnings Adjustments to reconcile net earnings to cash flows from operating activities: Depreciation and amortization of property and intangibles Stock based compensation Asset write-downs Gain on sale of assets/businesses Deferred tax provision Accounts receivable allowances Changes in assets and liabilities, net of effects from acquisitions and divestitures: Increase in accounts receivable (Increase)Decrease in inventories Increase in accounts payable and accrued liabilities Increase in other current and non-current assets (Decrease increase in other current and non-current liabilities Net cash flows from operating activities 6,9295,642 962 1,258 795 (1,217) (1,307) (1,016) 2,406 (31) 17 (1,185) (644) 3,951 (275) (1,844) 22,201 (633) 581 2,725 (411) 8,979 21,056 Cash flows from investing activities Additions to property, plant and equipment Proceeds from the disposal of assets/businesses, net Acquisitions, net of cash acquired (3,670) 3,203 (899) (3,279) 1,832 (35,151)

JOHNSON & JOHNSON Balance Sheet (Dollars in Millions) 2018 2017 Assets Current assets Cash and cash equivalents $18,107 17,824 Marketable securities 1,580 472 Accounts receivable trade, less allowances 14,098 13,490 for doubtful accounts $248 (2017, $291) Inventories 8,599 8,765 Prepaid expenses and other receivables 2,6992,537 Assets held for sale 950 - Total current assets 46,033 43,088 Property, plant and equipment, net 17,035 17,005 Intangible assets, net 47,611 53,228 Goodwill 30,453 31,906 Deferred taxes on income 7,6407,105 Other assets 4,182 4,971 Total assets $152,954 157,303 Liabilities and Shareholders? Equity Current liabilities Loans and notes payable $2,796 3,906 Accounts payable 7,537 7,310 Accrued liabilities 7,601 7,304 Accrued rebates, returns and promotions 9,380 7,210 Accrued compensation and employee related 3,098 2,953 obligations Accrued taxes on income 818 1,854 Total current liabilities 31,230 30,537 Long-term debt 27,684 30,675 Deferred taxes on income 7,506 8,368 Employee related obligations 9,951 10,074 Long-term taxes payable 8,242 8,472 Other liabilities 8,589 9,017 Total liabilities $93,202 97,143 Shareholders? equity Preferred stock - without par value (authorized and unissued 2,000,000 shares) Common stock - par value $1.00 per share 3,120 3,120 (authorized 4,320,000,000 shares; issued 3,119,843,000 shares) Accumulated other comprehensive income (loss) (15,222) (13,199) Retained earnings 106,216 101,793 94,114 91,714 Less: common stock held in treasury, at 34,362 31,554 cost (Note 12) (457,519,000 shares and 437,318,000 shares) Total shareholders equity 59,752 60,160 Total liabilities and shareholders equity $152,954 157,303

(Dollars in Millions) Description Net cash flows from operating activities Net cash used by investing activities Net cash used by financing activities $ 2018 22,201 $ (3,167) (18,510) 2017 21,056 (14,868) (7,673) Cash flow trends $25,000 $20,000 $15,000 $10,000 $5,000 1 2018 2017 $(5,000) $(10,000) $(15,000) $120,000) $(25,000) (Dollars in Millions) Net cash flows from operating activities Net cash used by investing activities Net cash used by financing activities Current assets Non Current Assets Current liabilities Total liabilities Shareholders Equity Description 2018 (Series 1 2017 (Series 2) 46,033 43,088 106,921 114,215 31,230 30,537 61,972 66,606 59,752 60,160 Composition of Latest Balance Sheet (2018 & 2017) Composition of Latest Balance Sheet (2018) 20% 15% 350,000 300,000 250,000 200,000 150,000 100,000 50,000 20% 10% 2 Non Current Assets Total liabilities Non Current Assets Current assets Current liabilities Shareholders Equity Current liabilities Current assets Total liabilities Shareholders Equity

Johnson and Johnson appears to be performing well in the current year (2018) compared to 2017

During the year 2018, revenue has grwon from $76,450mn to $ 81,581mn while earnings have grown from $1,300mn to $15,297mn This, however, is prmarily on account of decline in tax expense for the year compared to last year

The company is generating steady cash flows compared to last year. However, the company has repurchased its stock and made dividend payments resulting in significant cash outflows from financing activities

The balance sheet of the company continues to be strong