nalysis and Interpretation of Profitability Balance sheets and income statements for Johnson &…

 
   

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nalysis 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$61,095$53,324$50,514Cost products sold17,75115,05714,010Gross profit43,34438,26736,504Selling, marketing and administrative expenses20,45117,43317,211Research expense7,6807,1256,462Purchase in-process research and development807559362Restructuring745—-Interest income(452)(829)(487)Interest expense, net of portion capitalized2966354Other (income) expense, net534(671)(214)30,06123,68023,388Earnings before provision for taxes on income13,28314,58713,116Provision for taxes on income2,7073,5343,056Net earnings$ 10,576$ 11,053$ 10,060AssetsCash and cash equivalents$7,770$4,083Marketable securities1,5451Accounts receivable trade, net9,4448,712Inventories5,1104,889Deferred taxes on income2,6092,094Prepaid expenses and other receivables3,4673,196Total current assets29,94522,975Marketable securities, noncurrent216Property, Plant and equipment, net14,18513,044Intangible assets, net14,64015,348Goodwill, net14,12313,340Deferred taxes on income4,8893,210Other assets3,1702,623Total assets$ 80,954$ 70,556Liabilities and Shareholders’ EquityLoans and notes payable$2,463$4,597Accounts payable6,9095,961Accrued liabilities6,4124,587Accrued rebates, returns and promotions2,3182,189Accrued salaries, wages and commissions1,5121,391Accrued taxes on income223724Total current liabilities19,83719,161Long-term debt7,0742,014Deferred taxes on income1,4931,319Employee related obligations5,4025,584Other liabilities3,8293,160Total liabilities37,63531,238Shareholders’ equityPreferred stock-without par value (authorized and unissued 2,000,000 shares)—-Common stock-par value $1.00 per share3,1203,120Accumulated other comprehensive income(693)(2,118)Retained earnings55,28049,29057,70750,292Less: common stock held in treasury, at cost14,38810,974Total Shareholders’ equity43,31939,318Total liability and shareholders’ equity$ 80,954$ 70,556(a) Compute net operating profit after tax (NOPAT) for 2007. 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. 2007 NOPAT = $Answer(b) Compute net operating assets (NOA) for 2007 and 2006. 2007 NOA = $Answer2006 NOA = $Answer(c) Compute RNOA, net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2007. Do not use NOPM x NOAT to caculate RNOA. (Do not round until your final answers. Round answers to two decimal places.)2007 RNOA = Answer%2007 NOPM =Answer%2007 NOAT =Answer(d) Compute net nonoperating obligations (NNO) for 2007 and 2006.2007 NNO = $Answer2006 NNO = $Answer(e) Compute return on equity (ROE) for 2007. (Round your answers to two decimal places. Do not round until your final answer.) 2007 ROE = Answer%(f) Infer the nonoperating return component of ROE for 2007. (Use answers from above to calculate. Round your answer to two decimal places.)2007 nonoperating return = Answer%