You are writing this report about Johnson & Johnson (NYSE: JNJ). There is no required length to the project. However, I believe that a good project will have a length of about 10 pages (with about 6 -7 for the first part and 3-4 for the second part). Therefore, be as objective, but precise, as possible. Teams must submit the sections with a cover sheet, references, tables and appendices in only one document.

10 points (out of 100) will be dedicated to evaluate the intangibles of the project and fall under categories such as: 1) absence of typos and grammatical errors, 2) formatting and presentation, 3) proper citation, 4) report flow and organization, 5) depth of the analysis and range of the sources used and 6) overall quality of the report. These points will be equally distributed across the two deadlines.

This section 1 represents a total of 20 points (out of 100), assigned as follows:

5 points for the description of the Firms Business Lines you need to find a correct balance from too little and too much information in this sub-section as you provide a quick overview of the firm and a description of the various lines of business of the firm.

5 points for a Macro-Economic Analysis Provide me with a thorough overview of the current state of the domestic economy with an eye on the areas most relevant for the firms business prospects. You will find valuable information about the economy in the Fed's Beige Book as well as in the Survey of Current Business. Based on the Domestic / International split of the firms revenues, you must also discuss the global economic environment with emphasis on the regions important for the firm. You can find such information from the IMF's World Economic Outlook publications among other resources.

5 points for the Industry Outlook I would recommend you to check at least the following resources (a) Value Line Investment Survey, which will provide a summary page for the industry as well as individual one-page tear sheet for the major companies in the industry, 2 Company web pages and various investment research forum, including but not limited to yahoo finance webpage for the company (explore the many links on the page itself and the places those links take you, dont limit yourself to the stock quote of the company). The goal of the Industry Analysis is to determine what the outlook is for primary industry the firm is engaged in.

5 points for the Firm Position and Firms Economic Advantages When discussing Firms Position - you need to document the position of the firm within the context of the industry based on news reports, management discussion as well as analysts reports from a size / revenue / expansion point of view, i.e., you should be comparing the firm with its closest competitors which you need to name. When discussing Firms Economic Advantages in view of its current industry position and its abilities to capitalize on industry trends or its incoming inabilities to do so, you should talk about companys innovations, contracts, business relationships, position vis--vis current and projected industry regulatory changes, patent protection situation, In this section, the analysis need not be too detailed but must emphasize the main economic factors in the current economy. It matters more that you describe the economic activity of the firm and the current climate in the specific industry: orders falling, new technology, consolidation or other important developments affecting the industry.

Company web pages and various investment research forum, including but not limited to yahoo finance webpage for the company (explore the many links on the page itself and the places those links take you, dont limit yourself to the stock quote of the company). The goal of the Industry Analysis is to determine what the outlook is for primary industry the firm is engaged in. [I will also provide a copy of the Value Line Data sheet for our company in the project folder in Content area of Blackboard website for our class. Feel free to explore other online resources.]

This section 2 represents a total of 25 points (out of 100) earned for performing a complete decomposition of ROE for the most recent three years. You may obtain information to calculate the ratios in the firms financial statements. The credits are assigned as follows:

5 points for the decomposition of the firms ROE

5 points for the decomposition of the ROE at the Industry level

5 points for the analysis of any apparent trends in your companys Ratios

5 points for the comparison of the ratios to the industrys ratios

E.5 points for the comments and contrasts of the firms advantages as described in Section I and how they are reflected or failed to be reflected in the firms ratios

For this section, you need to analyze the historical behavior of key ratios relevant for the firm. Once we understand how the firm has evolved, we need to concentrate on comparing this evolution with the overall industry trend. Was the company leading the industry and fell back or the opposite, the firm has tremendously, for example a retailer, increased inventory turnover? What prompted this increase? What are the strategic and financial consequences of this increase? Finally, we combine the knowledge from the industry analysis and the ratio analysis to understand better the source of the performance of the firm as measured by its overall ROE. If the firms ROE is high, is it due to improvement in operational efficiency? Is it simply a result of increased leverage? While both have the same impact on ROE, they clearly have different implications for valuation purposes.

VALUE LINE TIMELINESS 1 Ried11ATA6 69. 688 728 65. 662 68 721 DOS D6.5 26 Low 598 567 16.3 569 STS 70.3 81.8 913 2013 12020 12021 SAFETY BETA 0.00 2019-21 PROJECTIONS Ann'I Total Reum Akce 35% 77% 30 0% niider Dec TOT RETURN 1016 onal Dec ay nn nllIMMn 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 WNIE UIE PIB. LLC 61005 618R 61587 65030 61224 7312 7+301 CAPTAL STRUCTURE of 10/2/16 Total Debt 25989 ml Due in 5 Yr 13 ml erating Ma 365% 3600 redaion 3 12136 329 5876 6409 ea 4 Un capllallaed Arma rena 122 Pen don A 121151223 b 31 D 0103 2230 2300 Long-Term Debt milD 21 D 40 820 830 91560 6122 Prete med Stock None 30318 339 H588 5059 57080 61836 7153 71150 7330 B1720 Shr Common Stock 2720 S31728 saes 210% 10/28/16 MARKET CAP $318 bllllon arge Cap CURRENT POSITION 2014 2015 02/16 IS23 383 BUSINESS: Jomson & JohTson engaged n he reseadm &de ogy, drculaiory disease maragemen Rece uable D985 798 uelopmeni, m autacue, ad sae of broad range of producs n kn, eic). Employs aboul 127,10n. 0Moers & direciors own abou 818 8053 888 he neabae led. Has hee bushess segments: consume of common Blad Rock, 63 Warquad Group, 6 Othe 2 519 26 care,sincare.ora care, Mound care, eic), Phamaceuica Sale Steel, S. a16 Proy). Charman& CE0: Aex Gorsky Current Asset 593 61210 6319 anpsydolcs, oonraoepiue, demnalology, gasroln- no.: NJ Address: One JonTISon & Jomson Pleza, New BruSwick, Acc Payable 7633 6 68 les ra,e ic), al Medica Deuices & D lagnosics (elecrophysol HJ B933. Telephone: 732520dm. nleme Debt Due 3638 Othe COTS 16 Johnson & Johnson posted better new submissions it has lo new pharma, Current LED 23230 than-expected third-quarter results ceutical products that have the potential Ra Bt Past Eetd ANNUAL RATES 15 The company's share earnings came in at $1.53. versus last year's depressed $1.20. tween 2015 and 2019. One negative would Sales 2.5% 5.5% level and our estimate of $1.45. be a rew biosimilar that wil1 compete with Cash Flow' 6.5% 7.556 sales were up a healthy 4.3% and the im REMICADE. Ea 35% 8.5% 95% 7.5% 8.5% e rates, which Book Value 7.0% been a negative influence on the bot QARTERLYSALES Ful tom line. was mor. weakness that has unexpectedly shown up ar Per Jun. Per Sep. Per Dec. Pel endar Year The Pharmaceutical business is lead in the Consumer sector. As J&J has some 2013 7505 787 755 836 71312 ing the way. Sales in this iconic American brands. we think the segment 2014 8115 9195 8254 7 33 climbed 9.2% last quarter to $8.4 billion. slump may be temporary. The Medical 17811 2015 7787 7102 Highlighted for being partially successful segment also hasn't teen turning in an im 2016 8182 7820 8316 72 were IMBRUCA. a therapy rowed for rformance. Still. we think elec 2017 18350 19300 18600 13300 75060 treating certain cancers. EARIIIGS PER SIARE Ful e myelomas cular business. endcutters in the advanced ar Per Jun. Per Sep. Per Dec. Pel endar Year TO an anticoagulant. More surgery operation. and ACUVUE contact over drugs for patients with immune well as joint reconstrution. related inflammatory diseas which in should see better days ahead. All told. may well rise 99% this clude REMICADE SIMPONI also turned in solid perform in 2017. to $6.70 antipsychotics Highest rank ances. QIARTERLY DIWDEIDS PAD Ful schi hrenia products endar Mar 31 Jun 30 Sep.30 Dec.3 Year peline holds great prom 2012 2.40 JNJ oval and above average dividend growth pros- 2013 250 for INVCKAM ET and STELARA. The pects. Conservative investors may conside 2014 70 70 70 276 company believes that these between these making JNJ a core portfolio holding. 2015 70 75 75 75 295 two drugs along and several promising James A. Flood November 18, 2016 2016 75 A Years end onhe lasisunda In Decembe 2, 124 3, d'19.GAAP as of uesmenl plan aElable Company B Anancial S Att ng Stock Ptce Stablllty Growh Bence TO EamInge Predictab Sepember,at Deoembe ouderd relin- provided To subscribe call 1-800-VALUELINE THE PLEUSERIS VALUE LINE TIMELINESS 1 Ried11ATA6 69. 688 728 65. 662 68 721 DOS D6.5 26 Low 598 567 16.3 569 STS 70.3 81.8 913 2013 12020 12021 SAFETY BETA 0.00 2019-21 PROJECTIONS Ann'I Total Reum Akce 35% 77% 30 0% niider Dec TOT RETURN 1016 onal Dec ay nn nllIMMn 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 WNIE UIE PIB. LLC 61005 618R 61587 65030 61224 7312 7+301 CAPTAL STRUCTURE of 10/2/16 Total Debt 25989 ml Due in 5 Yr 13 ml erating Ma 365% 3600 redaion 3 12136 329 5876 6409 ea 4 Un capllallaed Arma rena 122 Pen don A 121151223 b 31 D 0103 2230 2300 Long-Term Debt milD 21 D 40 820 830 91560 6122 Prete med Stock None 30318 339 H588 5059 57080 61836 7153 71150 7330 B1720 Shr Common Stock 2720 S31728 saes 210% 10/28/16 MARKET CAP $318 bllllon arge Cap CURRENT POSITION 2014 2015 02/16 IS23 383 BUSINESS: Jomson & JohTson engaged n he reseadm &de ogy, drculaiory disease maragemen Rece uable D985 798 uelopmeni, m autacue, ad sae of broad range of producs n kn, eic). Employs aboul 127,10n. 0Moers & direciors own abou 818 8053 888 he neabae led. Has hee bushess segments: consume of common Blad Rock, 63 Warquad Group, 6 Othe 2 519 26 care,sincare.ora care, Mound care, eic), Phamaceuica Sale Steel, S. a16 Proy). Charman& CE0: Aex Gorsky Current Asset 593 61210 6319 anpsydolcs, oonraoepiue, demnalology, gasroln- no.: NJ Address: One JonTISon & Jomson Pleza, New BruSwick, Acc Payable 7633 6 68 les ra,e ic), al Medica Deuices & D lagnosics (elecrophysol HJ B933. Telephone: 732520dm. nleme Debt Due 3638 Othe COTS 16 Johnson & Johnson posted better new submissions it has lo new pharma, Current LED 23230 than-expected third-quarter results ceutical products that have the potential Ra Bt Past Eetd ANNUAL RATES 15 The company's share earnings came in at $1.53. versus last year's depressed $1.20. tween 2015 and 2019. One negative would Sales 2.5% 5.5% level and our estimate of $1.45. be a rew biosimilar that wil1 compete with Cash Flow' 6.5% 7.556 sales were up a healthy 4.3% and the im REMICADE. Ea 35% 8.5% 95% 7.5% 8.5% e rates, which Book Value 7.0% been a negative influence on the bot QARTERLYSALES Ful tom line. was mor. weakness that has unexpectedly shown up ar Per Jun. Per Sep. Per Dec. Pel endar Year The Pharmaceutical business is lead in the Consumer sector. As J&J has some 2013 7505 787 755 836 71312 ing the way. Sales in this iconic American brands. we think the segment 2014 8115 9195 8254 7 33 climbed 9.2% last quarter to $8.4 billion. slump may be temporary. The Medical 17811 2015 7787 7102 Highlighted for being partially successful segment also hasn't teen turning in an im 2016 8182 7820 8316 72 were IMBRUCA. a therapy rowed for rformance. Still. we think elec 2017 18350 19300 18600 13300 75060 treating certain cancers. EARIIIGS PER SIARE Ful e myelomas cular business. endcutters in the advanced ar Per Jun. Per Sep. Per Dec. Pel endar Year TO an anticoagulant. More surgery operation. and ACUVUE contact over drugs for patients with immune well as joint reconstrution. related inflammatory diseas which in should see better days ahead. All told. may well rise 99% this clude REMICADE SIMPONI also turned in solid perform in 2017. to $6.70 antipsychotics Highest rank ances. QIARTERLY DIWDEIDS PAD Ful schi hrenia products endar Mar 31 Jun 30 Sep.30 Dec.3 Year peline holds great prom 2012 2.40 JNJ oval and above average dividend growth pros- 2013 250 for INVCKAM ET and STELARA. The pects. Conservative investors may conside 2014 70 70 70 276 company believes that these between these making JNJ a core portfolio holding. 2015 70 75 75 75 295 two drugs along and several promising James A. Flood November 18, 2016 2016 75 A Years end onhe lasisunda In Decembe 2, 124 3, d'19.GAAP as of uesmenl plan aElable Company B Anancial S Att ng Stock Ptce Stablllty Growh Bence TO EamInge Predictab Sepember,at Deoembe ouderd relin- provided To subscribe call 1-800-VALUELINE THE PLEUSERIS