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Module 02 Project – Using Financial Statements

Module 02 Project – Using Financial Statements

Module 02 Project – Using Financial Statements

The next part of your project will require you to navigate to the website of Johnson & Johnson and locate the most recent annual reports ( attached with link at the bottom along with sample paper). 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.

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  • Use the annual report to find the total current assets and total current liabilities.
  • Compute the current ratio for JNJ for previous two fiscal years
  • Review reports on data for the last two years.
    • Net Cash Flows from Operating Activities
    • Net Cash used by Investing Activities
    • Net Cash used by Financing Activities
    • Cash and Cash Equivalents at the end of the Years
  • Create a Balance Sheet or Statement of Cash Flows for most recent two years
  • Identify 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.

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    samplepaper.docx

    FINANCIAL STATEMENTS 1

    Financial Statement 4

     

     

    Financial Statements

    Trang Nguyen

    Rasmussen College

     

     

     

    Author Note

    This paper is being submitted on April 14, 2019, for Jessica Khan’s H320/HSA3170 Section 04 Financial Management of Healthcare Organizations Online Plus.

    According to Johnson & Johnson (hereafter referred to as JNJ), annual report the total current asset for 2018 was $46,033,000 and 2017 was $43,088,000. The total current liabilities in 2018 was $31,230,000 and for 2017 it was $30,537,000.

    Current ratio is defined as “liquidity ratios that tell you about a company’s ability to meet all its financial obligations, including debt, payroll, payments to vendors, taxes, and so on.” (www.business-literacy.com/financial-concepts/current-ratio/). To calculate JNJ’s current ratio, we computed by dividing current asset by current liabilities, which gave us the current ratio of 1.47 for the quarter that ended in December 2018. As for 2017, the current ratio was 1.41. “During the past 13 years, JNJ’s highest Current Ratio was 2.48. The lowest was 1.20. And the median was 1.82.” (www.gurufocus.com/term/current_ratio/NYSE:JNJ/Current-Ratio/Johnson–Johnson). Base on these stats, it appears they are not doing bad or great.

    The statements of cash flows of JNJ shows the Net Cash Flows from Operating Activities to be $22,201,000 in 2018 and $21,056 in 2017. The total Net Cash used by Investing Activities was (3,167,000) in 2018 and (14,868,000) in 2017. The Net Cash used by Financing Activities was reported to have been (18,510,000) in 2018 and (7,673,000) in 2017. The case and case equivalents at the end of the years for 2018 was $18,107,000 and $17,824,000 for 2017.

    Attached is the balance sheet for the most recent two years, in which it includes assets, liabilities and shareholders’s equity. With the breakdown of these areas, the balance sheet gives a good glimpse of the company’s financial position along with what the company owns and owes (Investopia Staff, February 8, 2019, www.investopedia.com/articles/04/031004.asp).

    The common size balance graph shows JNJ financial statement trends to neither be positive or negative for the organization. The changes appears to be steady. We are only looking at assets, “this tpe of balance sheet analysis can be used to check out the company’s liabilities as well” (Begin To Invest, April 08, 2019). Instead of looking at numbers in millions or billions, we can look at it from the percentage perspective to see the percentage of short-term debt or the increase in goodwill and decrease in cash.

     

     

    After reviewing Johnson and Johnson balance sheet along with the above chart, in 2018 JNJ appear to be in a stronger financial position than 2017, but not by much. Overall there is not a huge difference between 2017 and 2017. Whereas to in the case of Academic Medical Center, going from losing $70 million in one year to making $39 million the following year would have shown a huge difference between the two years. Module 02 Project – Using Financial Statements

     

     

    References

    1. Annual Report 2018 Johnson & Johnson, http://www.investor.jnj.com/annual-meeting-materials/2018-annual-report

    2. Johnson & Johnson (NYSE: JNJ) Current Ratio: 1.47 (As of Dec. 2018)  https://www.gurufocus.com/term/current_ratio/NYSE:JNJ/Current-Ratio/Johnson–Johnson

    3. Current Ratio, http://www.business-literacy.com/financial-concepts/current-ratio/

    4. Investopia Staff, February 8, 2019, www.investopedia.com/articles/04/031004.asp

    5. Begin to Invest, April 8, 2019, https://www.begintoinvest.com/common-size-analysis-different-way-analyze-balance-sheet-financial-statements/

    Johnson and Johnson Common Size Balance Sheet – Analysis of Total Assets

    2018 Cash and cash equivalents Marketable securities Accounts receivable Inventory Prepaid expenses and other receivables Assets held for sale Total current assets Property, plant and equipment, net (Less accumulated depreciation) Intangible assets, net Goodwill Deferred taxes on income Other assets Total noncurrent assets 0.11838199720177309 1.0329903108124011E-2 9.2171502543248296E-2 5.6219516978960993E-2 1.7645828157485256E-2 6.2110176915935508E-3 0.30095976568118521 0.11137335408031172 0 0.31127659296259008 0.19909907553905096 4.9949658067131295E-2 2.7341553669730768E-2 0.69904023431881479 2017 Cash and cash equivalents Marketable securities Accounts receivable Inventory Prepaid expenses and other receivables Assets held for sale Total current assets Property, plant and equipment, net (Less accumulated depreciation) Intangible assets, net Goodwill Deferred taxes on income Other assets Total noncurrent assets 0.11330998137352752 3.0005785013636102E-3 8.5758059286854038E-2 5.5720488484008568E-2 1.6128109444829404E-2 0 0.27391721709058314 0.10810346910103431 0 0.33837879760716577 0.2028314781027698 4.5167606466500955E-2 3.1601431631945988E-2 0.72608278290941686

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