UNIVERSITY OF ROEHAMPTON

SUMMATIVE ASSESSMENT
FINANCIAL PERFORMANCE MANAGEMENT

REPORT (CASE STUDY ANALYSIS)

VISA INC. (V) v/s MASTERCARD INC. (MA)
FINANCIAL YEARS: 2022/2021

Module title : FINANCIAL PERFORMANCE MANAGEMENT

Module Code : RBP020L062S
Student Id : VAR22556240
Table of Contents
1. INTRODUCTION...............................................................................................................3

2. FINANCIAL PERFORMANCE USING RATIO ANALYSIS (PART- I)...........................3

2.1 LIQUIDITY RATIOS.......................................................................................................4

I. Current ratio.....................................................................................................................4

II. Quick ratio........................................................................................................................5

2.2 PROFITABILITY RATIOS..............................................................................................6

I. Gross margin...................................................................................................................6

II. Net Profit Margin..............................................................................................................7

2.3 LEVERAGE RATIOS.....................................................................................................8

I. Debt to Equity..................................................................................................................8

II. Interest Coverage Ratio..................................................................................................9

2.4 WORKING CAPITAL RATIOS.....................................................................................10

I. Inventory days...............................................................................................................10

II. Account Payable Days..................................................................................................11

2.5 VALUATION RATIOS..................................................................................................12

I. Earnings per share........................................................................................................12

II. Book value per share....................................................................................................13

3. BALANCED SCORE CARD (PART- II)..........................................................................14

3.1 Introduction.....................................................................................................................14

3.2 The Balanced Scorecard................................................................................................14

3.3 Justification.....................................................................................................................16

4. IMPACT OF THE CORONAVIRUS PANDEMIC ON FINANCIAL PERFORMANCE.....18

Introduction...........................................................................................................................18

Financial Performance.........................................................................................................18

Non-Financial Performance.................................................................................................19

Conclusion............................................................................................................................20

5. CONCLUSION.................................................................................................................21

6. REFERENCES................................................................................................................22

Appendix: Ratio Calculations..............................................................................................25

1. INTRODUCTION
The report that follows is a summative evaluation that includes a thorough examination of
an international organization’s financial and non-financial performance over the previous
two fiscal years, 2022 and 2021. Johnson & Johnson (JNJ) (company A) has been
specifically chosen for analysis in the paper, and Pfizer Inc. (PFE) has been recognized
as its closest rival (company B). PFE and JNJ are two of the biggest best-known
pharmaceutical corporations in the world. JNJ concentrates on pharmaceuticals, medical
equipment, and consumer goods, whereas PFE develops and markets cutting-edge
drugs and vaccines for a range of therapeutic areas. Due to their similar emphasis on
healthcare products, these businesses- both of which have their corporate headquarters
in the United States are viewed as rivals (Healthcare, 2021; Hoovers, 2021).

Using the balanced scorecard approach and the financial analysis theoretical framework,
this paper analyses JNJ and PFE’s financial and non-financial performance. Analysts and
investors frequently utilize financial analysis to assess the financial health of businesses
(Johnson, 2022; Inc., 2021). A strategic management tool known as the balanced
scorecard technique is used to evaluate and manage the performance of businesses
from four different angles: financial, customer, internal processes, and learning and
growth (Johnson, 2021; Inc., 2021). Additionally, it assesses how the COVID-19
pandemic has affected JNJ and PFE’s financial performance and rates the steps those
companies have taken to resolve the problems the pandemic has brought about.

Overall, this study offers educated insights into the financial and non-financial
performance of JNJ and PFE, serving as a valuable resource for investors, management,
and stakeholders.
 2. FINANCIAL PERFORMANCE USING RATIO ANALYSIS
(PART- I)
The financial performance of JNJ and PFE for the years 2022 and 2021 is assessed
in this section. This section compares the financial standing of these businesses
using ratio analysis, comparing five different types of ratios: liquidity, leverage,
profitability, working capital, and valuation.

2.1 LIQUIDITY RATIOS

I. Current ratio

CURRENT RATIO
1.6
1.34 1.39
1.4
1.21
1.2
0.99
1
0.8
0.6
0.4
0.2
0
Jhonson & Jhonson Pfizer Inc.

CURRENT RATIO 2022 CURRENT RATIO 2021

The current ratio evaluates a company’s capacity to meet its immediate liabilities with its
current assets (Brigham, 2019). A ratio of 1 or greater is typically seen as appropriate
because it shows that a business has adequate liquid assets to pay its short-term
obligations.

Compared to JNJ, PFE had a higher current ratio in both 2021 and 2022, which shows a
stronger ability to satisfy short-term obligations. With a current ratio of 1.34 in 2021and fell to
0.99 in 2022. On the other hand, PFE outperformed JNJ in terms of the current ratio in both
years. PFE’s current ratio was 1.39 in 2021; it rose to 1.21 in 2022.

This might be explained by the fact that PFE has more current assets than liabilities, such as
cash, accounts receivable, and inventories (Ross, 2019).
 II. Quick ratio

QUICK RATIO
1.4
1.18
1.2 1.11
1
1

0.8 0.76

0.6

0.4

0.2

0
Jhonson & Jhonson Pfizer Inc.

QUICK RATIO 2022 QUICK RATIO 2021

The quick ratio gauges a business’s capacity to settle short-term debt with its most liquid
assets. In 2021 and 2022, PFE had a greater ratio than JNJ, demonstrating a superior
capacity to fund current liabilities with fast assets. JNJ’s quick ratio in 2022 was 0.76
compared to PFE’s indicating that the latter may have had trouble covering its immediate
obligations.

Ross, Westerfield, and Jordan’s (2019) explanation that a greater quick ratio indicates a
company’s ability to pay down its current creditors using its most liquid assets lends
credence to these findings.
 II.2 PROFITABILITY RATIOS

I. Gross margin

GROSS MARGIN
0.8
0.7 0.67 0.68

0.6
0.5
0.4
0.3 0.24 0.26
0.2
0.1
0
Jhonson & Jhonson Pfizer Inc.

QUICK RATIO 2022 QUICK RATIO 2021

The gross margin, which is calculated as the difference between revenue and cost of goods
sold, assesses the profitability of a company’s goods or services. JNJ outperformed PFE in
terms of gross margin in 2021 and 2022.

JNJ’s gross margin was 0.68 in 2021 and 0.67 in 2022, a little decline. In contrast, PFE’s
gross margin dropped from 0.26 in 2021 to 0.24 in 2022.

These results be examined using Porter’s Five Forces paradigm, which contends that the
intensity of competitive competition, the threat of new entrants, the threat of substitute goods
or services, and the bargaining power of customers are the major factors affecting profitability
(Porter, 1985).

In conclusion, even though JNJ outperformed PFE in terms of gross margin in 2021 and
2022, this discrepancy can be attributed to several industry-related variables that have an
impact on profitability. Hence, when assessing a company’s financial performance.
 II. Net Profit Margin

NET PROFIT MARGIN

0.18
0.158
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.019
0.02 0.006
0.005
0
Jhonson & Jhonson Pfizer Inc.

NET PROFIT MARGIN 2022 NET PROFIT MARGIN 2021

The ratio of net income to revenue is used to compute the net profit margin, which serves as
a measure of a company’s profitability.

With a margin of 0.019 compared to a PFEs margin of 0.06, according to the statistics
provided, JNJ had a larger net profit margin in 2022. JNJ had a net profit margin of 0.005 in
2021, while PFE had a margin of 0.158. These results imply that JNJ had a better year of
profitability in 2022 whereas PFE had a better year of profitability in 2021.

A higher net profit is typically indicative of a company’s capacity to produce profits from its
sales income, according to Brigham and Houston (2019).

However, several variables, including the cost of goods sold, pricing policies, and operating
expenses, can have an impact on a company’s net profit margin.
 II.3 LEVERAGE RATIOS

I. Debt to Equity

DEBT TO EQUITY
1.6
1.43 1.45
1.4 1.34

1.2
1.05
1
0.8
0.6
0.4
0.2
0
Jhonson & Jhonson Pfizer Inc.

DEBT TO EQUITY 2022 DEBT TO EQUITY 2021

According to the data, PFE had a lower debt-to-equity ratio in 2021 and 2022 than JNJ. PFE
had a ratio of 1.05 in 2022 while JNJ had a ratio of 1.43. PFE had a ratio of 1.34 in 2021
while JNJ had a ratio of 1.45.

Because PFE appears to rely more on equity financing than JNJ does, this may mean that
PFE is taking on less financial risk. Debt can, however, also be a crucial instrument for
businesses to finance development and expansion, it is vital to note.

A lower debt-to-equity ratio may suggest that a company is in a stronger financial situation,
as noted by Brigham and Houston (2019), but it’s necessary to take the industry and other
aspects into account when evaluating the ratio.
 II. Interest Coverage ratio

INTEREST COVERAGE RATIO

90
80.4
80
70
60 52.9
50
40
30
20
11.57
8.25
10
0
Jhonson & Jhonson Pfizer Inc.

INTEREST COVERAGE RATIO 2022 INTEREST COVERAGE RATIO 2021

According to the data, JNJ had a greater interest coverage ratio in both 2021 and 2022 than
PFE. JNJ’s interest coverage ratio in 2022 was 52.9, meaning the business made $52.9 in
operating income for every $1 in interest expenditure. PFE, on the other hand, had an
interest coverage ratio of 11.57 in 2022, meaning that the business made $11.57 in operating
income for every $1 in interest expenditure.

However, both companies’ interest coverage ratios decreased from 2021 to 2022, with JNJ’s
falling from 80.4 to 52.9 and PFE’s rising from 8.25 to 11.57. This could imply that both
companies’ interest expenses were higher in 2022, which could be cause for concern.

Overall, a high-interest coverage ratio is desirable since it indicates that a company’s

operating income is sufficient to pay its interest expenses (Brigham, 2019).
 II.4 WORKING CAPITAL RATIOS

I. Inventory days

INVENTORY DAYS
160
144.55
140
125.25
120
105.81
100 94.14

80
60
40
20
0
Jhonson & Jhonson Pfizer Inc.

INVENTORY DAYS 2022 INVENTORY DAYS 2021

The inventory days ratio calculates how long a business keeps its stock before selling it.
According to the data, PFE was able to sell its inventory more quickly than JNJ in both 2021
and 2022 because it had a lower inventory days ratio in those years. PFE had 94.14
inventory days in 2022, compared to 144.55 for JNJ. PFE had 105.81 days of inventory in
2021 while JNJ had 125.25 days. This shows that PFE had a better method for managing its
inventories, which may have helped the company be more profitable.

Ross, Westerfield, and Jordan (2019), who assert that an effective inventory management
system can result in improved profitability and better cash flow, support these findings. It’s
crucial to keep in mind that a low inventory days ratio may also signify a shortage of stock,
which can result in missed sales. As a result, businesses should try to balance keeping just
enough inventory to meet demand with reducing surplus inventory.
 II. Account Payable Days

ACCOUNT PAYABLE DAYS

80
71.37
70 65.15
63.07
60
50 47.96

40
30
20
10
0
Jhonson & Jhonson Pfizer Inc.

ACCOUNT PAYABLE DAYS 2022 ACCOUNT PAYABLE DAYS 2021

The amount of time it takes a business to pay its accounts payable is measured by the
account payable days ratio. According to the provided information, JNJ and PFE had
different account payable days ratios for the two years.

The account payable days ratio for JNJ climbed to 63.07 days in 2022, indicating that the
business was taking longer to settle its accounts payable during that time. PFE’s account
payable days ratio, on the other hand, grew to 71.37 days in 2022. According to (Hutton,
2021, pp. 513-542) businesses with greater operating cash flows and lower levels of
borrowing tended to have longer account payable days ratios.
 II.5 VALUATION RATIOS

I. Earnings per share

EARNINGS PER SHARE

1
0.9 0.87
0.8
0.71
0.7
0.6
0.5
0.4
0.3
0.19
0.2
0.1 0.04
0
Jhonson & Jhonson Pfizer Inc.

EARNINGS PER SHARE 2022 EARNINGS PER SHARE 2021

A frequently used financial indicator that depicts a company’s profitability on a per-share

basis is earnings per share (EPS). According to the above data, PFE had a lower EPS in
2021 and 2022 than JNJ 0.71. PFE had an EPS of 0.87 in 2021 compared to JNJ’s of 0.19.

This conclusion might indicate that JNJ is more lucrative per share in both years than PFE. A
greater EPS, in (Damodaran, 2022) estimation, means that a business is making more
money for its shareholders.

As a result, additional research is necessary to certain the overall performance of JNJ and
PFE.
 II. Book value per share

BOOK VALUE PER SHARE

35

30 29.26
28.12

25

20
17.1
15 13.83

10

0
Jhonson & Jhonson Pfizer Inc.

BOOK VALUE PER SHARE 2022 BOOK VALUE PER SHARE 2021

In 2021 and 2022, according to the above data, JNJ had a greater BVPS than PFE. JNJ’s
book value per share (BVPS) in 2022 was higher than PFE’s, which was $17.1, at $29.26.
The BVPS for JNJ in 2021 was $28.12, which was also greater than the BVPS for PFE,
which was $13.83.

With a stringer equity basis per share, JNJ may be more stable and have room for long-term
growth, as this finding implies. On the other hand, PFE has a lower BVPS, which can be a
sign of a smaller equity base per share and thus weaker financial stability.

Ross, Westerfield, and Jordan (2019), who argue that a higher BVPS suggests a bigger
equity base per share and may imply more stability and potential for long-term growth,
provide support for these findings. A lower BVPS could mean weaker financial stability and a
lower equity basis per share.
 3. BALANCED SCORE CARD (PART- II)

3.1 Introduction
JNJ is a well-known pharmaceutical corporation with operations all over the world. It offers
healthcare solutions to patients, healthcare providers, and hospitals. The company’s goal is
to enhance people’s health and well-being by providing cutting-edge goods and services.
The goal of JNJ is to be the most dependable healthcare provider in the world. Delivering
value to all stakeholders, including clients, staff, shareholders, and communities, is a key
component of the company’s strategy.

3.2 The Balanced Scorecard

A management tool for coordinating an organization’s operations with its strategy and vision
is the balanced scorecard. About four different perspectives- financial, customer, internal
process, and learning and growth- it offers a framework for measuring and tracking success.
Hence, the below suggested Balanced Scorecard for JNJ:

Table 1: Balanced Scorecard for Johnson & Johnson

BALANCED SCORECARD

FINANCIAL PERSPECTIVE
OBJECTIVES GOALS INDICATORS INITIATIVES

Develop new products

Increase annual Annual Revenue
Revenue Growth and expand into new
revenue by 5% Growth rate
markets

Increase the net Reduce costs through

Profitability profit margin to Net Profit Margin process improvements
20% and efficiency gains

Implement inventory
Increase operating management and
Cash Flow Operating Cash Flow
cash flow by 10% account receivable
systems
 Evaluate investments
Return on Achieve an ROI of Return On and allocate resources
Investment (ROI) 15% Investment to projects with higher
ROI potential

CUSTOMER PERSPECTIVE
OBJECTIVES GOALS INDICATORS INITIATIVES

Increase overall
Conduct customer
Customer customer Customer
surveys and address
Satisfaction satisfaction rating satisfaction rating
feedback
to 95%

Develop marketing
Increase market
Market Share Market Share campaigns and expand
share by 5%
distribution channels

Increase customer Offer loyalty programs

Customer retention
Customer retention retention rate to and personalized
rate
85% customer service

Acquire 10% new Develop targeted

New customer Number of new
customers marketing campaigns
acquisition customers
annually and referral programs.

INTERNAL PROCESS PERSPECTIVE

OBJECTIVES GOALS INDICATORS INITIATIVES

Launch 3 new Number of new Invest in research and

Product Innovation
products annually product launches development

Reduce
Implement process
Operational manufacturing Manufacturing cost
improvements and
Efficiency costs by 5% per unit
automation
annually

Improve supply chain

Supply Chain Reduce lead times management and
Lead time
Optimization by 10% develop partnerships
with key suppliers
 Implement quality
Achieve a 99%
Quality control processes and
product quality Product quality rating
Management invest in employee
rating
training

LEARNING AND GROWTH PERSPECTIVE

OBJECTIVES GOALS INDICATORS INITIATIVES

Implement employee
Increase employee Employee
Employee recognition programs
engagement by engagement survey
Engagement and career development
10% score
opportunities.

Develop 90% of Percentage of

Talent Implement leadership
the leadership leadership team
Development development programs
team internally developed internally

Implement 2 new Number of new Invest in technology

Technology
technologies technologies research and
Adoption
annually implemented development.

Increase
knowledge sharing Percentage of Implement a knowledge
Knowledge
across employees sharing platform and incentivize
Sharing
departments by knowledge participation
20%

3.3 Justification
The goal of JNJ’s strategy is to increase its market share through the creation of cutting-edge
goods, market expansion, and improved operational effectiveness. They aim to be the
leading healthcare organization in the world, and their mission is to promote people’s health
and well-being.

The goals are concentrated on increasing sales revenue, boosting profitability, controlling
financial risk, and boosting shareholder value from a financial standpoint. These objectives
are consistent with the Business’s plan to increase product options, cut expenses, and boost
operational effectiveness.

The goals of the consumer viewpoint are to increase customer satisfaction, boost brand
reputation, grow the customer base, and deliver first-rate customer service. These objectives
are consistent with the organization’s aim to enhance the health and well-being of people
around the world by providing high-quality healthcare products.

The goals of the internal process perspective are to improve product quality, increase
production capacity, and stimulate innovation. These objectives are consistent with the
business’s plan to boost productivity and broaden its product line.

The goals of the learning and growth viewpoint are to improve organizational culture,
construct knowledge management systems, invest in technology and infrastructure, and
enhance staff skills and capacities These objectives support the company’s vision of
becoming the leading healthcare provider in the world by investing I insole, streamlining its
operations, and utilizing technology to spur innovation.

Three pillars serve as the foundation for JNJ’s strategy: innovation, diversity, and worldwide
presence (FundingUniverse, n.d.). The company wants to grow its footprint in foreign
markets while maintaining a diverse portfolio of businesses and making significant
investments in R&D to sour innovation (Johnson, 2021). With the aid of this strategy, JNJ is
better able to satisfy the changing demands of its clients and tackle significant healthcare
issues.

“Caring for the world, one person at a time” is the company’s mission (Johnson, 2021).
Through the creation and distribution of cutting-edge healthcare solutions and products, the
corporation is dedicated to enhancing the health and well-being of people everywhere.

The company’s mission statement, which reads, “Our Credo: We believe our first
responsibility is to the doctors, nurses, and patients, to mothers and fathers, and to all others
who use our products and services,” demonstrates its dedication to putting its stakeholders
needs and safety first in all aspects of its operations (Johnson, 2021).

Overall, these three components of JNJ’s corporate strategy are linked tightly and help the
business succeed in the long run (FundingUniverse, n.d.). The organization can continue to
provide value to its customers and stakeholders while attaining sustainable growth and
profitability by investing in innovation and maintaining a varied portfolio. Additionally, JNJ’s
dedication to worldwide development shows that the company understands how crucial
global markets are to our development and success.
4. IMPACT OF THE CORONAVIRUS PANDEMIC ON FINANCIAL
PERFORMANCE

Introduction
The COVID-19 pandemic has impacted all over the world and disturbed the global
economy. The effects of the epidemic on businesses’ financial and non-financial
performance have received a lot of attention in the literature. This essay tries to offer a
critical examination of the pandemic’s consequences on Johnson & Johnson (JNJ), a
large global healthcare corporation, in terms of both financial and non-financial
performance.

Financial Performance
Both positive and negative consequences of the epidemic have been seen in JNJ’s
financial performance. Positively, the company’s pharmaceutical division has seen an
increase in demand for certain goods like Stelara and Remicade, which are used to treat
immune-related illnesses. These goods were a major factor in JNJ reporting a 2.1%
increase in pharmaceutical sales in Q2 2020 over the same period the previous year
(Koons, 2020). Additionally, due to consumer stockpiling and growing health concerns,
JNJ’s consumer health sector, which manufactures goods like Tylenol and Listerine, has
seen a rise in demand. Consumer health sales saw a rise of 7.3% in Q2 2020, according
to the firm (Koons, 2020).

But the epidemic has also had a detrimental effect on JNJ’s financial performance in a
number of ways. Sales of the company’s medical equipment division have decreased as
a result of a reduction in demand brought on by the postponement of non-essential
medical treatments. Sales of medical devices decreased by 32.5% year over year in Q2
2020 according to JNJ (Koons, 2020).In addition, the pandemic has hampered JNJ’s
capacity to manufacture and distribute goods effectively due to disruptions in its global
supply chain. Due to supply chain interruptions in Q2 2020, JNJ reported a 17.2%
decrease in worldwide operational sales (Koons, 2020).

In order to address these issues, JNJ has increased its online sales channels and
invested in new technology. In order to create new goods, the corporation has also put
more emphasis on research and development. One such product is the COVID-19
vaccine, which received emergency use approval in the US in February 2021.
Non-Financial Performance
JNJ’s non-financial performance has been significantly impacted by the pandemic as
well. JNJ has had to play a crucial part in the pandemic response as a healthcare
provider. The business has contributed to the creation and distribution of vital medical
supplies and equipment, including ventilators and protective gear for healthcare workers,
as well as the development of a COVID-19 vaccine. JNJ has won praise for its
contributions, which have proved essential in the fight against the pandemic.

The pandemic had brought attention to the difficulties JNJ and other healthcare
organizations confront in responding to pandemics and other global health crises. The
pandemic has highlighted the need for higher investments in public health infrastructure
and disaster preparedness and exposed flaws in the world healthcare system. The
pandemic, according to the report by McKinsey & Company (2020), has underlined the
significance of companies’ social and environmental impact as well as their capacity to
react quickly and effectively to the crisis.

For other businesses, JNJ’s approach to the epidemic has served as an example. In
reaction to shifting conditions, the organization has proven its flexibility and adaptability,
as well as its dedication to assisting public health initiatives. Development and distribution
of the COVID-19 vaccine by JNJ have been essential in the global effort to combat the
pandemic. The Lie et al. (2021, pp. 144-154) study found that “firms that are better
equipped to handle unexpected disruptions through agile strategies and resource
flexibility are more likely to weather the storm and emerge stronger in the long term." This
was demonstrated by J&J's response to the pandemic, which allowed the corporation to
quickly change its business strategy and adapt to the changing demands of the
international healthcare system. The company's dedication to its basic values of
supporting health and well-being has also been reinforced through J&J's efforts to assist
public health projects. The business has additionally shown its dedication to helping its
workers during the pandemic by putting in place measures like remote work regulations
and increased mental health support. Other businesses can learn a lot from J&J's
handling of the pandemic in terms of how to handle similar emergencies and prioritize
employee and public health.

The pandemic has also emphasized how crucial it is for businesses to invest in digital
technologies and build a strong online presence. A (Deloitte, 2020) analysis found that
businesses that had made investments in digital technologies and had a significant web
presence prior to the pandemic were better prepared to handle the issue. During the
pandemic, J&J was able to continue operations and interact with customers and
stakeholders thanks to its digital capabilities and internet presence. For instance, J&J
introduced a virtual reality platform to train surgeons on medical devices, enabling remote
training and lowering the demand for face-to-face communication during the pandemic
(Gonsalves, 2021). J&J's investments in digital technology have helped the company
handle the pandemic and have set it up for success in the long term.

Conclusion
In conclusion, JNJ’s financial and non-financial performance has been significantly
impacted by the COVID-19 epidemic. During the pandemic, the company saw a spike in
demand for its consumer and healthcare goods, which helped to drive its financial
performance. However, the pandemic also causes production delays and supply chain
interruptions, which had a detrimental effect on business operations. The pandemic also
highlighted the value of funding research and development, as Johnson & Johnson's
COVID-19 vaccine played a significant role in its success. The pandemic reaction by J&J
has illustrated the value of flexibility, adaptation, and dedication to both employee and
public health. As a result of the epidemic, businesses must prioritize digital capabilities
and a strong online presence and emphasize the value of digital investments. Other
businesses can learn a lot from J&J's approach to the pandemic about how to handle
similar crises and come out better in the end.
5. CONCLUSION
The verdict:

By comparing the financial performance of Johnson & Johnson (JNJ) and its main
competitor Pfizer Inc. (PFE), using ratio analysis, a balanced scorecard, and considering
the effect of the coronavirus pandemic on financial performance, it is possible to gain
important insights into the company’s strengths, weaknesses, and potential for growth.
JNJ has demonstrated continuous financial performance, effective management
techniques, and a dedication to ethical business conduct. However, PFE still has space
for development in terms of its financial performance and sustainability practices. PFE
has demonstrated a competitive edge in its innovation and research capabilities.

Both businesses have been damaged by the coronavirus pandemic in different ways, but
JNJ has demonstrated resilience and agility in responding to shifting conditions and has
played a crucial role in the worldwide effort to contain the pandemic through the
development and marketing of the COVID-19 vaccine. PFE, meantime, has made
contributions to the pandemic fight despite still having difficulties producing and
distributing its COVID-19 vaccine.

Overall, the analysis highlights the value of evaluating businesses holistically, taking into
account not only financial performance but also non-financial factors like sustainability
practices, innovation capacity, and responsiveness to unforeseen upheavals. For
investors, stakeholders, and decision-makers in the healthcare sector as well as other
businesses looking to assess and compare organizations’ performance and growth
prospects, the findings of this research offer invaluable insights.

6. REFERENCES
1. Brigham, E. F. &. H. J. F., 2019. Fundamentals of financial management. Boston, MA: Cengage

Learning.

2. Company, M. &., 2020. Responding to coronavirus: The minimum viable nerve center.

McKinsey & Company: Risk Insights.

3. Damodaran, A., 2022. Investment valuation: Tools and techniques for determining the value

of any asset. Hoboken, NJ: John Wiley & Sons..

4. Deloitte, 2020. COVID-19: Managing supply chain risk and disruption. Deloitte Insights.

5. FundingUniverse, n.d. Johnson & Johnson Corporation-History. [Online]

Available at: https://www.fundinguniverse.com/company-histories/johnson-johnson-

corporation-history/

[Accessed 20 April 2023].

6. Gonsalves, T., 2021. Johnson & Johnson uses VR to train surgeons during pandemic.

VRWorldTech.

7. Healthcare, D., 2021. Company analysis: Johnson & Johnson. [Online]

Available at: https://www.datamonitorhealthcare.com/company-analysis-johnson-johnson/

[Accessed 20 April 2023].

8. Healthcare, D., 2021. 'Company analysis: Johnson & Johnson'. [Online]

Available at: https://www.datamonitorhealthcare.com/company-analysis-johnson-johnson/

[Accessed 20 April 2023].

9. Hoovers, 2021. Pfizer Inc. Company Profile. [Online]

Available at: https://www.hoovers.com/company-information/cs/company-

profile.pfizer_inc.8810d704a1097c31.html

[Accessed 20 April 2023].

10. Hoovers, 2021. 'Pfizer Inc. Company Profile'. [Online]

Available at: https://www.hoovers.com/company-information/cs/company-

profile.pfizer_inc.8810d704a1097c31.html

[Accessed 20 April 2023].

11. Hutton, A. P. M. A. J. &. T. H., 2021. 'Opaque financial reports, R2, and the value premium'.

Journal of Financial and Quantitative Analysis, 56(2), pp. 513-542.

12. Inc., P., 2021. Annual Review 2021, s.l.: s.n.

13. Inc., P., 2021. Our response to COVID-19. [Online]

Available at: https://www.pfizer.com/news/hot-topics/covid_19_response

[Accessed 20 April 2023].

14. Johnson, J. &., 2021. Our COVID-19 response. [Online]

Available at: https://www.jnj.com/coronavirus

[Accessed 20 April 2023].

15. Johnson, J. &., 2021. Our Credo & Values. [Online]

Available at: https://www.jnj.com/credo/

[Accessed 20 April 2023].

16. Johnson, J. &., 2022. Annual Report 2021, s.l.: s.n.

17. Koons, C., 2020. J&J's mixed Covid-19 impact revealed in second-quarter earnings. [Online]

Available at: https://www.bloomberg.com/news/articles/2020-07-16/j-j-s-mixed-covid-19-

impact-revealed-in-second-quarter-earnings

[Accessed 20 April 2023].

18. Li, J. L. Q. &. H. Z., 2021. Business model innovation and firm performance: The moderating

role of corporate social responsibility and the mediating role of agility. Journal of Business

Research, Issue 131, pp. 144-154

 19. Norton, R. S. K. a. D. P., 1996. The Balanced Scorecard: Translating Strategy into Action.

Boston, Massachusetts: Harvard Business Press.

20. Porter, M. E., 1985. Competitive advantage: creating and sustaining superior performance.

New York: Free press.

21. Ross, S. A. W. R. W. &. J. B. D., 2019. Essentials of corporate finance. 10th edition ed. New

York, NY: McGraw-Hill Education

Appendix: Ratio Calculations

RATIO ANALYSIS

CALCULATIONS:

Johnson & Johnson Pfizer Inc.

Input data for Liquidity Ratios: 2022 2021 2022 2021
Current Assets 55,294 60,979 51,259 59,693
Current Liabilities 55,802 45,226 42,138 42,671
Inventories 12,483 10,387 8,981 9,059
Cash 14,127 14,487 416 1,944

LIQUIDITY RATIOS: 2022 2021 2022 2021

1.21645545
Current Ratio 0.9908964 1.34831734 6 1.39891261
Current Assets/Current Liabilities
1.00332241
Quick Ratio (or Acid Test Ratio) 0.7671947 1.11864856 7 1.18661386
(Current Assets-Inventories)/Current
Liabilities
0.00987232
Cash Ratio 0.253163 0.32032459 4 0.04555787
Cash/Current Liabilities

Johnson & Johnson Pfizer Inc.

Input data for Profitability Ratios: 2022 2021 2022 2021
Gross Profit 63,854 63,920 8,486 8,081
Operating Income 14,603 14,714 11,428 10,360
Pre Tax Income 21,725 22,776 34,729 24,311
Net Income 1,871 489 217 4,878
Sales 94,943 93,775 34,344 30,821
Total Equity 76,804 74,023 95,916 77,462
Total Assets 1,87,378 1,82,018 1,97,205 1,81,476

PROFITABILITY RATIOS: 2022 2021 2022 2021

0.24708828
Gross Margin 0.6725509 0.68163156 3 0.26219136
Gross Profit/Sales
Operating Margin 0.1538081 0.15690749 0.33275099 0.33613445
Operating Income/Sales
1.01121010
Pretax Margin 0.2288215 0.24287923 9 0.78878038
Pretax Income/Sales
0.00631842
Net Profit Margin 0.0197066 0.00521461 5 0.15826871
Net Income/Sales
0.00226239
Return on Equity (ROE) 0.0243607 0.00660605 6 0.06297281
Net Income/Tot.Equity
0.00110037
Return on Assets (ROA) 0.0099852 0.00268655 8 0.02687959
Net Income/Tot.Assets
LEVERAGE RATIOS Input: 2022 2021 2022 2021
Total Debt 1,10,574 1,07,995 1,01,289 1,04,014
Total Equity 76,804 74,023 95,916 77,462
Total Assets 1,87,378 1,82,018 1,97,205 1,81,476
EBIT (Operating income) 14,603 14,714 11,428 10,360
Interest Expense 276 183 987 1255
LEVERAGE RATIOS: 2022 2021 2022 2021
1.05601776
Debt/Equity Ratio 1.4396906 1.45893844 6 1.34277452
Total Debt/Total Equity
Debt/Capital Ratio 0.590112 0.59332044 0.51362288 0.57315568
Total Debt/(Tot.Equity+Tot.Debt)
2.05601776
Equity Multiplier 2.4396906 2.45893844 6 2.34277452
Total Assets/Total Equity
11.5785207
Interest Coverage Ratio 52.90942 80.4043716 7 8.25498008
EBIT/Interest Expense

Input data for Working Capital Ratios: 2022 2021 2022 2021
Inventories 12,483 10,387 8,981 9,059
Account Receivables 3,132 3,701 261 3811
Account Payables 5,447 3,977 6809 5578
Purchases 31,089 29,855 34344 30821
Sales 94,943 93,775 34,344 30,821
WORKING CAPITAL RATIOS: 2022 2021 2022 2021
Inventory Days 144.55 125.25 94.14 105.81
(Inventories/Purchases) x 360
Account Receivable Days 11.88 14.21 2.74 44.51
(Account Receivable/Sales) x 360
Account Payable Days 63.07 47.96 71.37 65.15
(Account Payable Days/Purchases) x
360
Duration Working Capital Cycle 93.35 91.50 25.50 85.17
Stock Period + Credit Period - Payable
Period

VALUATION RATIOS Input: 2022 2021 2022 2021

Earnings (Net Income) 1,871 489 217 4,878
Total Shares Outstanding 2,625 2,632 5608 5601
Current market price 178.19 171.54 51.24 59.05
Dividends per share 4.45 4.19 1.6 1.56
Total Equity 76,804 74,023 95,916 77,462

VALUATION RATIOS: 2022 2021 2022 2021

Earnings per share 0.71 0.19 0.04 0.87
Earnings/Tot.shares outstanding
Price/Earnings Ratio 250.02 923.33 1324.21 67.80
Market price/Earnings per share
Book Value per Share 29.26 28.12 17.10 13.83
Tot.Equity/Tot.shares outstanding
Dividend Yield 2.50% 2.44% 3.12% 2.64%
Tot. Dividends/Market Price