Johnson and Johnson Executive Summary Essay

The $10,000 investment make into Johnson and Johnson is a good investment to hit in your portfolio. This is because of the steadfast nature of Johnson and Johnson and the emergence trend of the confederation. Based on the JNJ 10-Ks for the pass away 5 courses end Jan. 1, 2012, the taxation trend is growing. Revenues fork over trend favorably from $61,095 in the grade end Jan. 2007 to $65,030 in the year ended Jan. 1, 2012. The confederation is also in operation(p) efficiently showing the more st able aspect of this investment by retentivity costs of goods sold at an ordinary percent of 29.94% for the five years ended Jan. 1, 2012. The follow is also well leveraged for growth. A good measure of this leverage is the Debt symmetry, which is a measure of the total liabilities of a company in proportion to the total assets.The Debt Ratio volition also expose the risks in the companys debt-load by revelation the extent of assets that are financed with debt. The debt rati o for JNJ has trended from 2.00 in the year ended Dec. 28, 2008 to 2.01 Jan. 1, 2012 with an increase in the fiscal years ended Jan 2, 2011 and Jan 3 2010 to 2.22 and 2.15, respectively. These ratios show that the company has two assets for either one dollar of a indebtedness the company has thereby showing that the company is financially unchanging and able to compensation the obligations it has. Johnson and Johnson is also able to generate profits from its invested capital. Return on asset (ROA) is a ratio that describes what earnings are generated from invested capital and is often referred to as go down on investment.From the years ended Dec. 28, 2008 with Jan 2, 2011, the company has had a consistent ROA dowery of 15.25%, 12.95%, and 12.96%, respectively. The ROA percentage decreased to 8.51% in the year ended Jan. 1, 2012 because of continued additions of assets through acquisitions that will continue to generate growth in the future. Market perception is also a valuabl e indicator when determining voice investments. The worth to earnings ratio is a valuation of a companys current market share toll compared to its per-share earnings. Generally, a high P/E ratio suggests that an investor can expect higher earnings growth in the future. The price to earnings ratio has increased well to 18.53 in the fiscal year ended Jan. 1, 2012 from the 12.75 price to earnings ratio in the year ended Jan. 2, 2011, as shown in the table below.Lastly, most financially repair and stable companies offer dividends to their stockholders. A dividend is a distribution of cash, stock, or property in a portion of a companys earnings. The cash dividends per share have trended favorably for investors looking to have a return on their investment from $1.62 in the year ended Dec. 28, 2007 to $2.25 for the year ended Jan. 1, 2012. In summary, Johnson and Johnson is continually investing into fresh consumer, pharmaceutical, and medical device fields which has created a large, well diversified company that is able to stay one step before of its competitors thereby creating a strong stable investment option for investors.