Johnson &Johnson valuation project report
This report is constructed as follows: section I introduces the selected firm briefly; section II and III gives projected income statement and balance sheet; section IV demonstrates how we calculate FCF, followed by firm value estimation; section V provides a sensitivity analysis of firm value to sales growth rate, FCF growth rate in second stage and WACC.
I Company Profiles
Johnson & Johnson is a U.S. multinational medical devices, pharmaceutical and consumer packaged goods manufacturer founded in 1886. Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500.
Johnson & Johnson ranked at the top of Harris Interactive's National Corporate Reputation Survey for seven consecutive years up to 2005, was ranked as the world's most respected company by Barron's Magazine in 2008, and was the first corporation awarded the Benjamin Franklin Award for Public Diplomacy by the U.S. State Department in 2005 for its funding of international education programs.
Johnson & Johnson is headquartered in New Brunswick, New Jersey with the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in over 57 countries and products sold in over 175 countries. Johnson & Johnson had worldwide sales of $65 billion for the calendar year of 2011.
The accounts in Balance Sheet are projected mainly based on sales and corresponding elaborations are demonstrated in depth in following parts.
II Income Statement
In this part, we project items in the income statement with various methods, including sales, COGS, SG&A, D&A, interest expense, etc. All the regression data have been adjusted into real term to obtain real growth rate, then transferred back into nominal growth rate for sales projection.
Sales Revenue
Sale projection is based on OLS estimation method with independent variable year t. Sample years are from 1985 to 2011, with 2008 to 2011 dropped from
I Company Profiles
Johnson & Johnson is a U.S. multinational medical devices, pharmaceutical and consumer packaged goods manufacturer founded in 1886. Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500.
Johnson & Johnson ranked at the top of Harris Interactive's National Corporate Reputation Survey for seven consecutive years up to 2005, was ranked as the world's most respected company by Barron's Magazine in 2008, and was the first corporation awarded the Benjamin Franklin Award for Public Diplomacy by the U.S. State Department in 2005 for its funding of international education programs.
Johnson & Johnson is headquartered in New Brunswick, New Jersey with the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in over 57 countries and products sold in over 175 countries. Johnson & Johnson had worldwide sales of $65 billion for the calendar year of 2011.
The accounts in Balance Sheet are projected mainly based on sales and corresponding elaborations are demonstrated in depth in following parts.
II Income Statement
In this part, we project items in the income statement with various methods, including sales, COGS, SG&A, D&A, interest expense, etc. All the regression data have been adjusted into real term to obtain real growth rate, then transferred back into nominal growth rate for sales projection.
Sales Revenue
Sale projection is based on OLS estimation method with independent variable year t. Sample years are from 1985 to 2011, with 2008 to 2011 dropped from