Sign in
You're viewing a shared conversation.
Roughly how many times has JnJ sold its inventory in FY2022? Calculate inventory turnover ratio for FY2022; if conventional inventory management is not meaningful for the company then state that and explain why.

To calculate the inventory turnover ratio for Johnson & Johnson (JNJ) in FY2022:

Formula:
inventory_turnover_ratio = cost_of_goods_sold / average_inventory

Step 1: Find Cost of Goods Sold (COGS) for FY2022:
COGS (FY2022) = $31,089 million [200406_0000200406-23-000016_jnj-20230101.htm:71] [200406_0000200406-23-000016_jnj-20230101.htm:71]

Step 2: Find Average Inventory for FY2022:

  • Inventory at start of FY2022 (Jan 2, 2022): $10,387 million [200406_0000200406-23-000016_jnj-20230101.htm:71] [200406_0000200406-23-000016_jnj-20230101.htm:71]
  • Inventory at end of FY2022 (Jan 1, 2023): $12,483 million [200406_0000200406-23-000016_jnj-20230101.htm:71] [200406_0000200406-23-000016_jnj-20230101.htm:71]
  • Average Inventory = (10,387 + 12,483) / 2 = $11,435 million

Step 3: Calculate Inventory Turnover Ratio:
inventory_turnover_ratio = 31,089 / 11,435 ≈ 2.72

MetricFY 2022
Cost of Goods Sold ($USD Millions)$31,089 [200406_0000200406-23-000016_jnj-20230101.htm:71] [200406_0000200406-23-000016_jnj-20230101.htm:71]
Inventory, Start of Year ($USD Millions)$10,387 [200406_0000200406-23-000016_jnj-20230101.htm:71] [200406_0000200406-23-000016_jnj-20230101.htm:71]
Inventory, End of Year ($USD Millions)$12,483 [200406_0000200406-23-000016_jnj-20230101.htm:71] [200406_0000200406-23-000016_jnj-20230101.htm:71]
Average Inventory ($USD Millions)$11,435
Inventory Turnover Ratio (times)2.72

Conclusion:
Johnson & Johnson turned its inventory over approximately 2.72 times in FY2022. [200406_0000200406-23-000016_jnj-20230101.htm:71] [200406_0000200406-23-000016_jnj-20230101.htm:71] Conventional inventory management analysis is meaningful for JNJ, as it holds significant inventory and operates in manufacturing and distribution of healthcare products, where inventory turnover is a relevant efficiency metric.

$JNJ
What is the average inventory days for JNJ in FY2022)?

To calculate Johnson & Johnson's average inventory days for FY2022:

Step 1: Gather Data

  • Beginning Inventory (2021): $10,387 million [200406_0000200406-23-000016_jnj-20230101.htm:71]
  • Ending Inventory (2022): $12,483 million [200406_0000200406-23-000016_jnj-20230101.htm:71]
  • Cost of Goods Sold (2022): $31,089 million [200406_0000200406-23-000016_jnj-20230101.htm:71]

Step 2: Calculation

  • Average Inventory = (10,387 + 12,483) / 2 = 11,435 million
  • Average Inventory Days = (11,435 / 31,089) * 365 = 134.4 days

Step 3: Present in Table

MetricFY 2022
Beginning Inventory ($USD Millions)$10,387 [200406_0000200406-23-000016_jnj-20230101.htm:71]
Ending Inventory ($USD Millions)$12,483 [200406_0000200406-23-000016_jnj-20230101.htm:71]
Cost of Goods Sold ($USD Millions)$31,089 [200406_0000200406-23-000016_jnj-20230101.htm:71]
Average Inventory ($USD Millions)$11,435
Average Inventory Days (Days)134.4

Johnson & Johnson's average inventory days for FY2022 is approximately 134.4 days. [200406_0000200406-23-000016_jnj-20230101.htm:71]