Description
Scenario
You work at Johnson & Johnson in the Accounting & Finance Department. You recently got promoted to CFO. Upon stepping into your new role, you have decided to clean your new office and remove what is not needed. You come across a financial proposal that the previous CFO was working on to purchase or merge with Bayer Pharmaceuticals. You know this is your major competitor which makes you wonder if the old CFO may have been on to the next profitable move. You decide to look at Johnson & Johnson’s current portfolio to decide if this would be an investment that would maximize the company’s returns and minimize the company’s portfolio risk even more.
Instructions- apa format
Using Microsoft Word, create a portfolio analysis that addresses the following:
- Explain how current investments have made Johnson and Johnson successful
- Analyze Johnson & Johnson’s portfolio as a whole to include price-to-earnings ratio, dividend yield, and earnings per share compared against a major stock market index.
- Critique each industry holding as a stand alone
- Evaluate Johnson and Johnson’s risk level from their current Beta.
NOTE - Be sure the portfolio analysis displays proper grammar, spelling, punctuation, and sentence structure.
Explanation & Answer
View attached explanation and answer. Let me know if you have any questions.
1
Portfolio Analysis Outline
Institutional Affiliating
Student’s Name
Course Code
Professor’s Name
Due Date
2
Portfolio Analysis Outline
Introduction
Explain how current investments have made Johnson and Johnson successful
Analyze Johnson & Johnson’s portfolio as a whole to include price-to-earnings ratio,
dividend yield, and earnings per share compared against a major stock market index.
Critique each industry holding as a stand alone
Evaluate Johnson and Johnson’s risk level from their current Beta.
Conclusion
References
1
Portfolio Analysis
Institutional Affiliating
Student’s Name
Course Code
Professor’s Name
Due Date
2
Portfolio Analysis
Introduction
Johnson & Johnson is multinational cooperation in America launched in 1886 whose
main role is to manufacture pharmaceuticals, devices, and packaged customers. Its ordinal stock
is an element of the Dow Jones manufacturing average. The organization is graded number 36 in
the fortune 500 lists in 2021 among the largest cooperation in the United States. In Johnson
&Johnson company, I was promoted to be the Chief Financial Officer responsible for controlling
the economic actions like financial planning and cash flow.
a
How Investments Made the Company Successful
The company has been involved in several investments that have contributed to its
success. The recent acquisition has made the company successful by delivering differentiated
drugs; the pharmaceutical industry has changed its portfolio by increasing its management in
immunology, developed its proficiency in oncology, and arrived vaccines. The organization's
business of pharmaceuticals is in the progress of releasing six essential new goods between 2009
and 2012. Two of the current goods are undecided regulatory assessments in the European
Union, and two extra major components are recorded in main markets. Most of these goods
would symbolize essential improvements over the new care principles.
Secondly, it has created a transformational pipeline; therapeutic business prioritizes
investments in interior Red, planned licensing preparations, acquisition selection, and partnership
to remain to create a robust pipeline for a long time. (Brown & Nwagbara,2018) The
organization's medication business is expected to case 11 goods and over crucial line addition
between 2011 and 2015. It has also reinforced geographic attendance since the business will
3
increase its geographic footmark and rise investments in upcoming markets, assessing market
suitable business approaches and collections. It also maintenance as the main advanced market.
Japan's second greatest drug market is the major growth marketplace and corporate medication
business, with seven presentations prepared for 2021.
Lastly, the company has invested in gifted individuals and organizational abilities; the
company’s medication business is reinforcing management abilities locally, globally, and
regionally. A may element includes rotating main gifts into significant duties to rapidly quicken
the skills to report a complex and growing business platform. The therapeutic business is also
creating R&D abilities in the current technology parts and evolving markets.
B
Johnson & Johnson’s Portfolio
Eleme
nts
Quant
ity
Buyi
ng Price
Divide
nds Received
Quant
ity
Mar
ket Price
In The Year
STOC
1000
$100
$6
1000
$111
STOC
1000
$250
$8
1000
$240
STOC
1000
$85
$10
1000
$100
Kx
Ky
Kz
Total
$435000
Total dividends received = $24000
$451000
4
Major Stock Index
Johnson & Johnson has three stocks that perform individually and differently. There are
three different elements in the company portfolio; each behaves as an individual item. Stock x
reaches 1000 items in total. The cost of each item is $100 per share; the purchasing price of the
stock x, therefore, becomes $100,000. In the market, each item of the 1000 items fetches a
selling price of $111. All the stock x is sold at the total price of $111,000. When compared
against a major stock index, the price of one item per share is high in Johnson & Johnson's. The
dividend for the stock received in that year is $6.
For stocky, 1000 total items belong to the category of this stock. Each product pe...
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