Johnson & Johnson Annual Report Analysis

Annual Report Analysis Project

[pic 1]

September 15, 2016

Mr. Harry Ford

Course Instructor

Intermediate Accounting

Your University

Dear Sir:

It gives us great pleasure to submit this report on “Annual Report Analysis” on the basis of the previous one-year annual report of Johnson & Johnson, as you authorized us, as a group, to prepare and submit no later than October 9, 2016.

It was a fantastic opportunity for us to prepare this report under your guidance, which really was a great experience for us. We have collected information from the company’s annual report, website and text books.

We all have worked very hard and tried our very best to prepare this report. We would be very happy to provide further information if necessary.

Sincerely,

Sally Fields

Sally Fields

On behalf of Group A

Acknowledgements

_________________________________________________

First, we would like to thank our respective course instructor, Mr. Harry Ford for assigning us such an interesting project that we enjoyed working on. We must declare that without his suggestions and guideline this project would not have been possible. We gathered all our information directly from Johnson & Johnson’s 2015 Annual Report, websites and from our text book. We have discussed and worked together as a group in obtaining all necessary information and finally as a group prepared this analysis.

Last, but certainly not least, many heartfelt thanks to our family and friends for encouraging us and aided us with your comments and suggestions

Contents

_________________________________________________

Executive Summary

_________________________________________________

A financial report means the presentation of financial data of a company’s position, operating performance and cash flows for an accounting period with other useful instructive components.  It is a written report which quantitatively describes the financial health of the company. A financial report contains financial statements along with related information that may be used by internal and external parties. Financial statement includes an income statement, a balance sheet, a statement of cash flows. Financial reports may be published monthly, quarterly and/or annually. The main goal of presenting useful information to financial statements is to aid in good decision making.

This report analyzes Johnson & Johnson’s 2015 Annual Report that was filed with the SEC on February 24, 2016. Johnson & Johnson trade stock on NASDAQ and is registered with the New York Stock Exchange. This company is a biotechnology & drug whose main focus is human health and well-being.

This report includes a summary of the letter of the Chairman on the Board of Directors, a summary of the auditors and management reports, and analyzes all aspects of the financial statements and notes to the financial statements.

1. Company Profile

_________________________________________________

Johnson & Johnson (JNJ) was incorporated in the State of New Jersey, in 1887. The company sure has come a long way over the past 109 years. JNJ was founded by three brothers and now operates over 250 facilities, and employs approximately 127,100 employees worldwide, engaged in research and development, manufacture and sale of a very broad range of products in the healthcare field. The main focus of JNJ is human healthcare and well-being.

JNJ is organized into three business segments; consumer, pharmaceutical and medical devices.

• The consumer segment includes a broad range of baby care, oral, skin care, over the counter pharmaceuticals, women’s health and wound care products. Included in these products are Johnsons baby care products, Listerine, Aveeno, RoC, Clean & Clear and Tylenol, to just name a few.

• The pharmaceuticals segment focuses on five therapeutic areas;

1. Immunology (e.g. Rheumatoid Arthritis, Inflammatory Bowel Disease, and Psoriasis)
2. Infectious Diseases & Vaccines (e.g. HIV, Hepatitis, Repertory Infections and TB)
3. Neuroscience (E.G. Alzheimer’s Disease, Mood Disorders, and Schizophrenia)
4. Oncology (e.g. Prostate cancer, Hematologic Malignancies, and Lung Cancer)
5. Cardiovascular & Metabolic Diseases (e.g. Thrombosis and Diabetes)

• The prescription products included in this segment are Simponi-a treatment for Rheumatoid Arthritis, Xarelto-a treatment for the prevention of deep vein thrombosis, and various other prescription pharmaceuticals to prevent, control or cure in the therapeutic areas mentioned above.

• The medical devices segment includes various devices used in Orthopedics, Surgery, Cardiovascular, Diabetes care and Vision care fields.

JNJ competes locally (United States) and globally in all their product lines without regard to the number or size of the competing companies. Research & Development plays a significant role in the company’s business. JNJ is committed to investing in research & development with the aim of developing high quality and innovative products. JNJ’s businesses are subject to varying degrees of government regulation in the countries in which operations are conducted. The general trend is toward increasingly stringent regulation. The exercise of broad regulatory powers the U.S. Food & Drug administration (the FDA) continues to result in increases in the amounts of testing and documentation required for FDA approval of new drugs. The cost of human health care has been and continue to be a subject of study, investigation and regulation by governmental agencies.

...