And the ratio would be 45274000 divided by 35964000

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which equals $9,309,000 in working capital. And the ratio would be $45,274,000 divided by $35,964,000 which equals 1.26. Johnson & Johnson has sufficient working capital to address its bills to suppliers. Their net cash flow from operating activities has remained positive and continues in 2019 to remain positive at $23,416,000 (Mergent, n.d.). However, their cash flow from financing activities is negative, which is due to Johnson & Johnson making dividend payments, and it did repurchase common stock in 2019, which satisfies investors. There is a potential for cash inflow at the end of the year due to the amount of cash left over after the operational and working capital payments are made. Working Capital Management Direction The working capital for year-end December 2019 was $9,9309,000 ($45,274,000 minus $35,964,000) with a working capital ratio of 1.5 ($45,274,000 divided by $35,964,000). For fiscal year-end January 2021, the working capital is $8,744,000 ($51,237,000 minus $42,493,000, which makes the ratio 1.2 ($51,237,000 divided by $42,493,000). From year-end December 2019 to fiscal year-end January 2021, their current assets increased but so did their current liabilities. The working capital for Johnson & Johnson for 2021 is projected to continue to increase. In 2019 Johnson & Johnson had more cash and accounts receivable they were able to have an increase in shareholder equity in 2020 by $3,807,000. 3
5-1 ACTIVITY: WORKING CAPITAL MANAGEMENT Reference Fernando, J. (2021, March 1). Working Capital. Investopedia. Retrieved from %20is%20calculated%20by,%2C%20accounts%20receivable%2C%20and%20inventory . Fuhrmann, R. (2020, October 7). How Do You Calculate Working Capital? Investopedia. Retrieved from - calculate-working-capital.asp Maverick, J.B. (2018, August 29). What is Considered a Good Working Capital Ratio. Investopedia. Retrieved from - proper-ratio-between-working-capital-current-assets-and-current- liabilities.asp#:~:text=Generally%2C%20a%20working%20capital%20ratio,necessarily %20considered%20to%20be%20better . Mergent. (n.d.). Johnson & Johnson [Company profile]. Retrieved March 26, 2021, from 4

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