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Cash Flow to Total Liabilities Ratio


Calculate the Cash Flow to Total Liabilities Ratio and the Return to Net Operating Ratio
for Johnson and Johnson (2002)


Here are the sites with the financial statements and data:





I have also attached the text pages with the example of how to calculate
the Cash Flow to Total Liabilities Ratio and the Return to Net Operating Ratio

These are initial calculations which I think are incorrect or incomplete:

(please refer to formulas in the two image files and solve

Cash flow to total liabilities ratio:

Total Cash on Hand at end of year = 2,894,000,000
Total Liabilities = 17,859,000,000
2,894,000,000/17,859,000,000 = 0.1620 or

Return to net operating ratio:

Net operating margin:

Net operating profit X 100 / net operating revenues
6,597,000,000 X 100/25,851,000,000

Return on total assets:
(Profit before taxation) X 100 / average total assets
9,291,000,000 X 100/40,556,000,000

Return on equity:
(Profit before taxation - taxation) X 100 / average equity
(9,291,000,000 - 2,694,000,000) X 100/22,697,000,000


In your solution, please make sure you follow the formulas in the two image files
AND tell me where you pulled in each number from.

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Solution Preview

I obtained the following numbers by following the link provided:


Here are the calculations:

Cash Flow To Total Liabilities Ratio:

(Revenue - Expense) + Depreciation / Total Liabilities

Total Liabilities:

Total Current Liabilities = 11,449,000
Long Term Debt = 2,022,000
Deferred Tax Liability = 643,000
Employee Related Obligat. = ...

Solution Summary

The cash flows to total liabilities ratios are determined. The financial statements and data are analyzed.