Johnson & Johnson, the world’s leading and most diversified healthcare corporation, serves its customers through specialized worldwide franchises. Each of its franchises consists of a number of companies throughout the world that focus on a particular healthcare market, such as surgical sutures, consumer pharmaceuticals, or contact lenses. Information related to its property, plant, and equipment in its 2017 annual report is shown in the following notes to the financial statements.
Johnson & Johnson provided the following selected information in its 2017 cash flow statement.
Instructions
a. What was the cost of buildings and building equipment at the end of 2017?
b. Does Johnson & Johnson use a conservative or liberal method to depreciate its property, plant, and equipment?
c. What was the actual interest paid by the company in 2017?
d. What is Johnson & Johnson’s free cash fl ow? From the information provided, comment on Johnson & Johnson’s financial flexibility.
