Analysis and Interpretation of Profitability
Question # 00530892
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Updated on: 05/20/2017 04:30 AM Due on: 05/20/2017
Analysis and Interpretation of Profitability
Balance sheets and income statements for Johnson & Johnson follow. Refer to these financial statements to answer the requirements.
| Sales to customers | $63,747 | $61,095 | $53,324 |
| Cost products sold | 18,511 | 17,751 | 15,057 |
| Gross profit | 45,236 | 43,344 | 38,267 |
| Selling, marketing and administrative expenses | 21,490 | 20,451 | 17,433 |
| Research expense | 7,577 | 7,680 | 7,125 |
| Purchase in-process research and development | 181 | 807 | 559 |
| Restructuring | -- | 745 | -- |
| Interest (income) | (361) | (452) | (829) |
| Interest expense, net of portion capitalized | 435 | 296 | 63 |
| Other (income) expense, net | (1,015) | 534 | (671) |
| 28,307 | 30,061 | 23,680 | |
| Earnings before provision for taxes on income | 16,929 | 13,283 | 14,587 |
| Provision for taxes on income | 3,980 | 2,707 | 3,534 |
| Net earnings | $ 12,949 | $ 10,576 | $ 11,503 |
| Assets | ||
| Cash and cash equivalents | $10,768 | $7,770 |
| Marketable securities | 2,041 | 1,545 |
| Accounts receivable trade, net | 9,719 | 9,444 |
| Inventories | 5,052 | 5,110 |
| Deferred taxes on income | 3,430 | 2,609 |
| Prepaid expenses and other receivables | 3,367 | 3,467 |
| Total current assets | 34,377 | 29,945 |
| Marketable securities, noncurrent | 4 | 2 |
| Property, Plant and equipment, net | 14,365 | 14,185 |
| Intangible assets, net | 13,976 | 14,640 |
| Goodwill, net | 13,719 | 14,123 |
| Deferred taxes on income | 5,841 | 4,889 |
| Other assets | 2,630 | 3,170 |
| Total assets | $ 84,912 | $ 80,954 |
| Liabilities and Shareholders' Equity | ||
| Loans and notes payable | $3,732 | $2,463 |
| Accounts payable | 7,503 | 6,909 |
| Accrued liabilities | 5,531 | 6,412 |
| Accrued rebates, returns and promotions | 2,237 | 2,318 |
| Accrued salaries, wages and commissions | 1,432 | 1,512 |
| Accrued taxes on income | 417 | 223 |
| Total current liabilities | 20,852 | 19,837 |
| Long-term debt | 8,120 | 7,074 |
| Deferred taxes on income | 1,432 | 1,493 |
| Employee related obligations | 7,791 | 5,402 |
| Other liabilities | 4,206 | 3,829 |
| Total liabilities | 42,401 | 37,635 |
| 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 |
| Accumulated other comprehensive income | (4,955) | (693) |
| Retained earnings | 63,379 | 55,280 |
| 61,544 | 57,707 | |
| Less: common stock held in treasury, at cost | 19,033 | 14,388 |
| Total Shareholders' equity | 42,511 | 43,319 |
| Total liability and shareholders' equity | $ 84,912 | $ 80,954 |
(a) Compute net operating profit after tax (NOPAT) for 2008. Assume that the combined federal and statutory rate is: 37.1%.
Treat other (income) expense, net as non-operating. Round your answer to the nearest whole number.
2008 NOPAT =
-
Rating:
/5
Solution: Analysis and Interpretation of Profitability