Problem

Ratio Analysis for Feature CompanyJohnson&Johnson’ s 2012 financial statements include...

Ratio Analysis for Feature Company

Johnson&Johnson’ s 2012 financial statements include the following items (all dollars in millions):

 

2012

2011

Balance sheet

Current assets

$46,116

$54,316

Current liabilities

24,262

22,811

Total assets

121,347

113,644

Income statement

Sales

$67,224

$65,030

Gross profit

45,566

44,670

Net earnings (income)

10,514

9,672

Compute the following ratios and comment on the trend you can observe from the limited two years of data you have available.

a. Gross profit rate.

b. Net income as a percentage of sales.

c. Current ratio.

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