J&J AND P&G

Johnson & Johnson and Procter & Gamble

Johnson & Johnson and Procter and Gamble

Introduction

This paper focuses on the financial status of Johnson & Johnson and Procter & Gamble for 5 years that are from 2004 to 2008 in order to see their financial health and trend during this period of time.

Overview of the Johnson & Johnson

Johnson & Johnson ( NYSE : JNJ ) is a U.S. manufacturer of medical devices, pharmaceuticals, personal care products, perfumes and baby products founded in 1886. The company headquarters is located in New Brunswick, New Jersey, United States. The company includes some 230 subsidiary companies with operations in over 57 countries. Its products are sold in over 175 countries. The brands of Johnson & Johnson are numerous in medicines and first aid supplies.

Overview of the Procter and Gamble

Procter & Gamble (P & G) (NYSE: PG) is a multinational consumer goods. It is now among the largest companies in the world by capitalization of the market. With presence in over 160 countries, produces and distributes well-known firms such as Gillette, Duracell, Ariel, Tampax and over 300 brands of daily consumables.

Financial Comparison

Ratios Analysis

The profitability of Johnson & Johnson and Procter & Gamble is not so much satisfactory as the trends of the company from 2007 to 2011 shows that the company has been loosing its profits. This statement can be endorsed by the evaluation of the profitability ratios. The liquidity ratios that include current ratio, quick ratio and net current assets as a percentage of total assets are decreased from 2007 to 2011 from P&G while increased for J&J. The assets management ratios that are the efficiency ratios of Johnson & Johnson and Procter & Gamble are also not supportive. The reason of this statement is that the turnover of the company is not in favour of Johnson & Johnson and Procter & Gamble.

The long-term debt to equity, total debt to equity and interest coverage ratio of Johnson & Johnson and Procter & Gamble is increased, but the company's debt management structure shows a positive indication, this is mainly due to increase in debt but not significantly. The cash flow per share of Johnson & Johnson and Procter & Gamble in 2007 was high, this was due to the financial crises, and however, the cash flow per share in 2009 was decreased and increased in 2010. Johnson & Johnson and ...