I need help completing the Forecasting and Valuation Step for Johnson and Johnson and Johnson and Procter and Gamble.
Here are the instructions:
1. Project the firm's future business activities and risk.
2. Develop expectations for future earnings, cash flows, and dividends.
3. Use these expected future payoffs to estimate firm value.
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2018 2017 2016 Sales to customers 81,581 76450 71,890 Cost of products sold 27,091 25,439 21,789 Gross profit 54,490 51,011 50,101 Selling, marketing and administrative expenses 22 540 21,520 20,067 Research and development expense 10,775 10,594 9,143 In process research and development 1,126 408 29 Interest income (61 1) (385) (368) Interest expense, net of portion capitalized (Note 4) 1,005 934 726 Other (income) expense, net 1,405 (42) 210 Restructuring (Note 22) 251 309 491 Earnings before provision for taxes on income 17,999 17.673 19,803 Provision for taxes on income (Note 8) 2,702 16,373 3,263 Net earnings 15,297 1.300 16.540 Net earnings per share (Notes 1 and 15) Basic 5.70 0.48 Diluted 5.61 0.47 5.93 Average shares outstanding (Notes 1 and 15) Basic 2,681.5 2.692.0 2,7373 Diluted 1,728.7 2.745.3 2,788.9 "Prior years amounts were reclassified to conform to current year presentation (adoption of ASU 2017-07) See Notes to Consolidated Financial StatementsJOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS At December 30, 2018 and December 31, 2017 (Dollars in Millions Except Share and Per Share Amounts) (Note 1) 2018 2017 Assets Current assets Cash and cash equivalents (Notes I and 2) $ 18,107 17,824 Marketable securities (Notes I and 2) 1,580 472 Accounts receivable trade, less allowances for doubtful accounts $248 (2017,$291) 14,098 13,490 Inventories (Notes I and 3) 8,599 8,765 Prepaid expenses and other receivables 2,699 2,537 Assets held for sale (Note 20) 950 Total current assets 46,013 43,088 Property, plant and equipment, net (Notes I and 4) 17,035 17,005 Intangible assets, net (Notes | and 5) 47,611 53,228 Goodwill (Notes | and 5) 30453 31,906 Deferred taxes on income (Note 8) 7,640 7,105 Other assets 4,182 1,971 Total assets 152.954 57.303 Liabilities and Shareholders' Equity Current liabilities Loans and notes payable (Note 7) 2,79 3,906 Accounts payable 7,537 7,310 Accrued liabilities 7,601 7,304 Accrued rebates, returns and promotions 9380 7,210 Accrued compensation and employee related obligations 3,098 2,953 Accrued taxes on income (Note 8) 818 1,854 Total current liabilities 31.230 30,537 Long-term debt (Note 7) 27,684 30,675 Deferred taxes on income (Note 8) 7,506 8,368 Employee related obligations (Notes 9 and 10) 9,951 10,074 Long-term taxes payable (Note 8) 8,242 8,472 Other liabilities 8,589 9,017 Total liabilities 93.202 97.143 Shareholders' equity Preferred stock - without par value (authorized and unissued 2,000,000 shares) Common stock - par value $1.00 per share (Note 12) (authorized 4,320,000,000 shares; issued 3,119,843,000 shares) 3,120 3,120 Accumulated other comprehensive income (loss) (Note 13) (15,222) (13,199) Retained earnings 106,216 101,793 94,114 91,714 Less: common stock held in treasury, at cost (Note 12) (457,519,000 shares and 437,318,000 shares) 34,362 31,554 Total shareholders' equity 59.752 60,160 Total liabilities and shareholders' equity 152.954 157,303Consolidated Balance Sheets Amounts In billlow; As of June & CURRENT ASSETS Cash and cash equivalents 2,569 1 5.569 Available-for sale investment securities 9,281 9.565 Accounts receivable 4,635 4.504 INVENTORIES Materials and supplies 1,335 1,308 Work in procom 585 Finished goods 2,815 2,787 Total inventories 4,735 4,624 Prepaid expenses and other current assets 2,045 2,139 TOTAL CURRENT ASSETS 23,320 15.404 PROPERTY, PLANT AND EQUIPMENT, NET 20 600 19.683 GOODWILL 45.175 14.609 TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET 23,902 24,187 OTHER NONCURRENT ASSETS 5,313 3,133 TOTAL ASSETS $ 118,310 $ 120,406 Liabilities and Shareholders' Equire CURRENT LIABILITIES Accounts payable 10,344 9.632 Accrued and ofbar liabilities 7,470 7.024 Debt due within one you 10423 13,534 TOTAL CURRENT LIABILITIES 28,237 10.210 LONG-TERM DEBT 20,863 18,038 DEFERRED INCOME TAXES 6.163 OTHER NONCURRENT LIABILITIES 10.164 3254 TOTAL LIABILITIES 54,625 SHAREHOLDERS' EQUITY Convertible Claw A preferred stock, stated wake $1 per share (600 shares authorized) 967 1,005 Non-Voting Claws B preferred stock, stated value $1 par share (200 whores authorized) Common stock, stated value $1 per share (10,000 shares authorized thames issued 2018 - 4,009.2, 2017 - 4,009.2) 4,009 4.009 Additional paid-in capital 63,9-45 63,641 Reserve for ESOP debt retirement (1,204) (1,249) Accumulated offer comprehensive income '(loss) (14,749) Treasury stock, at cost (shares held: 2018-1,511.2, 2017 - 1,435.9) (99.217) (93,715) Retained earnings 98,641 95,124 Nomocontrolling interest 590 TOTAL SHAREHOLDERS' EQUITY 52,853 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 118,310 $ 120,406Consolidated Statements of Earnings Amounts in pillow poorpiper don inecuts Therounded Jan: 3 NET SALES $ 66,832 $ 65.058 $ 65.299 Cost of products sold 34.253 32 535 32,909 Selling, general and administrative expense 18.853 18 565 18.949 OPERATING INCOME 13,711 13.953 13.441 579 Interest income 247 Other mon-operating income (expense), nat (40- 325 EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 13,326 13 257 13.369 Income taxes ou continuing operations 3.465 3.063 3.342 NET EARNINGS FROM CONTINUING OPERATIONS 9.861 10 194 10.027 NET EARNINGS FROM DISCONTINUED OPERATIONS 3.217 577 NET EARNINGS 9.851 13411 10.604 Less: Net earnings attributable to nomcontrolling interests 111 85 95 NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE $ 9750 5 15.326 $ 10,505 BASIC NET EARNINGS PER COMMON SHARE- Earnings from continuing operations $ 3.75 5 3.79 6 3.39 Earnings from discontinued operations 201 0.21 BASIC NET EARNINGS PER COMMON SHARE $ 3.75 5 3.80 3.80 DILUTED NET EARNINGS PER COMMON SHARE: " Earnings from continuing operations 3.57 5 3.69 3.49 Earnings from discontinued operations 1.90 0.20 DILUTED NET EARNINGS PER COMMON SHARE 3.57 3.59 3.69 DIVIDENDS PER COMMON SHARE Basic eel camings per common share and Diluted net earnings per common share are cilcubaled on Net earnings suribailable In Procter & Gamble
