FINANCIAL PERFORMANCE

Financial Performance

Financial Performance

Introduction

This paper focuses on the financial status of Johnson & Johnson and Procter & Gamble for 5 years that are from 2007 to 2011. This study will describe the importance of choosing the right strategy. The companies have become example in the strategic management because of its successful implementation of the strategy. Internal and external analysis of Johnson & Johnson and Procter & Gamble shows the set of managerial decisions and actions that determine the long-run performance of a corporation.

Ratios

As it is known that the most important factors in the well being of a business, is to see that it operates at a profit and to organize it in order to be able to meet its liabilities at appropriate times. If either of these points is not covered efficiently it could mean that the business might have to be closed down. This is the reason why we choose to calculate profitability and liquidity ratios which are the most important and reliable guides. In addition, various past studies states that we decide to calculate activity ratios in order to see how efficiently the company like Johnson & Johnson and Procter & Gamble has managed its debt management ratios, asset management ratios and per share values to commend upon the Johnson & Johnson and Procter & Gamble's sources of finance and whether a risk arises from increased debt.

Evaluation

Profitability Ratios

The profitability of Johnson & Johnson and Procter & Gamble is unsatisfactory as the trends of the company from 2007 to 2011 shows that the company has been loosing its profits. This statement can be endorsed by the evaluation of the profitability ratios. The return on assets of Johnson & Johnson and Procter & Gamble from 2007 to 2011 is reflecting that profitability structure of the company is declined. In addition ...