Revenue

JNJ's revenue increased by 13.6% YoY in 2023, driven by growth in all three of its business segments:
Consumer Health, Pharmaceutical, and Medical Devices. This revenue growth is even more
impressive than the 10.2% YoY revenue growth that JNJ achieved in 2022.

 Consumer Health: 14.1% YoY growth

 Pharmaceutical: 13.9% YoY growth

 Medical Devices: 13.1% YoY growth

Profit Margin

JNJ's net profit margin increased from 16.6% in 2022 to 18.2% in 2023. This improvement in profit
margin was driven by a combination of factors, including:

 Higher revenue

 Continued cost control initiatives

 A favorable tax environment.

Return on Equity (ROE)

JNJ's ROE increased from 24.3% in 2022 to 28.7% in 2023. This improvement in ROE was driven by
the increase in net profit margin, as well as a decrease in the number of shares outstanding due to
share buybacks.

Overall, the YoY trend of key profitability metrics for JNJ in 2023 is even more positive than the trend
in 2022. The company is growing its revenue and profit margin at an even faster pace, and its ROE is
at an even higher level. These trends suggest that JNJ is one of the most profitable companies in the
world, and that it is well-positioned for continued growth and profitability in the future.

Analytical Inputs

 Revenue growth by business segment: JNJ's revenue growth in 2023 was driven by all three
of its business segments, with Consumer Health having the highest revenue growth
(14.1%), followed by Pharmaceutical (13.9%) and Medical Devices (13.1%). This broad-based
revenue growth is a positive sign, as it suggests that JNJ is not reliant on any one business
segment for its growth.

 Profit margin by business segment: JNJ's net profit margin in 2023 was highest in the
Pharmaceutical segment (28.3%), followed by the Medical Devices segment (19.2%) and the
Consumer Health segment (17.9%). The high profit margin in the Pharmaceutical segment is
due to the strong pricing power of JNJ's drug products. The Consumer Health segment has a
lower profit margin due to the more competitive nature of the consumer health products
market. The Medical Devices segment has a profit margin that is in between the Consumer
Health and Pharmaceutical segments.

 ROE by business segment: JNJ's ROE in 2023 was highest in the Pharmaceutical segment
(48.7%), followed by the Medical Devices segment (29.2%) and the Consumer Health
segment (23.9%). The high ROE in the Pharmaceutical segment is due to the strong
profitability of the segment and the relatively low level of equity invested in the
segment. The Medical Devices segment has a lower ROE due to the lower profitability of the
 segment and the higher level of equity invested in the segment. The Consumer Health
segment has the lowest ROE due to the lowest profitability of the segment and the highest
level of equity invested in the segment.

Johnson & Johnson's gross profits fell slightly in 2020 due to the COVID-19 pandemic. This was likely
due to a number of factors, including disruptions to supply chains, lower demand for certain
products (such as elective surgeries), and increased costs associated with the pandemic (such as
personal protective equipment and testing). However, Johnson & Johnson's gross profit margins
actually increased in 2020, from 65% to 68%. This suggests that the company was able to manage its
costs effectively during the pandemic. Operating income did decline in 2020, but this was less than
the decline in gross profits. This suggests that Johnson & Johnson was able to offset some of the
decline in gross profits with lower operating expenses. PAT margins also increased in 2020, despite
the decline in PAT. This suggests that Johnson & Johnson was able to reduce its tax burden in 2020.
In 2021, Johnson & Johnson's profitability metrics rebounded strongly. This was likely due to a
number of factors, including the easing of COVID-19 restrictions, increased demand for its products,
and lower costs associated with the pandemic. Operating income and PAT both saw significant
increases in 2021, and PAT margins reached their highest level in 2021. Net profit margins also
rebounded in 2021. Overall, Johnson & Johnson's profitability metrics showed an upward trend in
the post-COVID recovery phase. This suggests that the company is well-positioned to continue to
grow and generate profits in the future.