the median firm on the WRDS database had a CATA of 0.489. The com-
pany’s current assets investment was in line with the median firm in the econ-
omy—its CLTA was 0.279 in 2003, whereas the median firm CLTA was
0.228, slightly lower. One could see a slight risk factor from the Johnson &
Johnson position of higher relative current liabilities to total assets: It had a
TDTA of 0.340 as of December 31, 2003, whereas the median firm TDTA
was 0.427, indicating that Johnson & Johnson’s total debt policy was less
debt-intensive than the median firm, meaning potentially lower risk. Johnson
& Johnson has been consistently lower in TDTA relative to the median
WRDS firm during the 1970–2003 period (see Table 2.2).
The use of debt, often referred to as leverage, can enhance stockholder
returns when the firm’s return on assets exceeds its cost of debt; however,
Consolidated Balance Sheets 17
TABLE 2.1 (Continued)
Assets Dec-03 Dec-02 Dec-01 Dec-00 Dec-99
Nonequity Reserves 0.00 0.00 0.00 0.00 0.00
Minority Interest 0.00 0.00 0.00 0.00 0.00
Preferred Stock 0.00 0.00 0.00 0.00 0.00
Common Equity 26,887.00 22,722.00 24,263.00 18,843.00 16,254.00
Common Stock 3,120.00 3,120.00 3,120.00 1,535.00 1,535.00
Capital Surplus 0.00 0.00 0.00 0.00 0.00
Revaluation 0.00 0.00 0.00 0.00 0.00
Reserves
Other Appropriated (64.00) (33.00) (15.00) (15.00) 0.00
Reserves
Unappropriated 0.00 0.00 0.00 0.00 0.00
(Free) Reserves
Retained 30,503.00 26,571.00 23,066.00 18,812.00 16,192.00
Earnings
Equity in 0.00 0.00 0.00 0.00 0.00
Untaxed Reserves
ESOP 0.00 0.00 0.00 0.00 0.00
Guarantees
Unrealized (373.00) (707.00) (697.00) (522.00) (477.00)
Foreign Exchange
Gain (Loss)
Unrealized Gain (153.00) (102.00) 182.00 67.00 81.00
(Loss) on
Marketable
Securities
Treasury Stock 6,146.00 6,127.00 1,393.00 1,034.00 1,077.00
Total Liabilities 47,589.00 40,345.00 38,230.00 31,302.00 29,100.00
and Shareholders’
Equity
Common Shares 2,967,973.00 2,968,295.00 3,047,215.00 2,781,874.00 2,779,366.00
Outstanding
(thousands)Data provided by Thomson, © Copyright 2004 Thomson.