2021 Cash Flow Analysis for Johnson & Johnson JNJ

Johnson & Johnson is a multinational corporation that develops medical devices, pharmaceuticals, and consumer packaged goods. The company is headquartered in New Brunswick, New Jersey, and was founded in 1886. Johnson & Johnson is renowned for its diverse range of healthcare products and its commitment to improving health and well-being worldwide.

The cash flow statement provides insight into how much cash or cash equivalents a company has generated and used during a specific period. It is divided into three sections: operating activities, investing activities, and financing activities. This statement is crucial for investors and analysts to understand how a company is managing its cash resources.

How to read the chart

The chart above illustrates the cash flow of Johnson & Johnson in 2021. The width of the bars represents the amount of cash flow, with wider bars indicating larger amounts.

We begin on the left with the company's cash position at the start of the year. The cash decreased during the year, indicating that a portion of it was used for financing and investing activities. The cash flow from operating activities is the largest source of cash, while the cash flow from investing activities is negative, showing that the company spent more on new investments than it received from selling assets or investments.

The cash flow from financing activities is also negative, reflecting that the company paid out more cash for purposes such as debt repayments, share buybacks, or dividend payments.

After accounting for the change in cash, we end on the right with the company's cash position at the end of the year.

Real-Time Cash Flow Counter

To get a sense of the scale of Johnson & Johnson's cash flow, we have created a real-time counter that simulates the company's cash flow for 2021. The counter starts when you scroll to this section and runs at the same speed as the company's reported cash flow.

This is not a live counter of real cash flows as they happen, but a simulation based on the company's reported cash flow for 2021. The counter is meant to give you a sense of the scale of the company's cash flow and how quickly it moves.

Cash Flow Statement

In 2021, Johnson & Johnson generated $23,536 million in cash from operating activities, spent $20,825 million on investing activities, and used $6,120 million in financing activities. Consequently, the company's cash balance decreased by $3,320 million during the year.

The company's beginning cash balance was $17,305 million, which typically includes cash and cash equivalents, such as short-term investments that can be easily converted into cash. The company's ending cash balance was $13,985 million.

The company's capital expenditures for the year were $3,347 million. This amount represents the cash the company spent on investments in property, plant, and equipment. Subtracting capital expenditures from cash flow from operations gives the company's free cash flow, which was $20,189 million in 2021. This amount represents the cash the company has available to pay dividends, repurchase stock, or make other investments.

Summary

Johnson & Johnson's cash flow in 2021 highlights a strong generation of cash from operating activities, which significantly contributes to its free cash flow of $20,189 million. Despite substantial investments reflected in the negative cash flow from investing activities, the company maintains a robust cash position, allowing it to continue investing in growth opportunities and returning value to shareholders through financing activities.