Financial Reporting Problem, Part 2 - Essay Example

Johnson and Johnson Asset ification Johnson and Johnson is an international company that deals in the provision of pharmaceutical and consumer packaged goods globally. From an analysis of the company’s annual report for the year 2012, it can be deduced that the assets of the company are classified according to their relative liquidity. Johnson and Johnson Company divides its assets into two main categories; current and non-current assets. The current assets are listed first in the balance sheet in order of liquidity followed by the non-current assets.

From the balance sheet, it can be seen that the current assets are listed starting with the most liquid asset, which is cash, followed by marketable securities, accounts receivable inventories, deferred taxes on income and prepaid expenses and other receivables respectively. From this, the cash is seen to be the most liquid current asset and prepaid expenses and receivables the least liquid of the current assets (Johnson and Johnson, 2012). Conversely, the non-current assets are listed starting with property, plant and equipment followed by intangible assets, goodwill, deferred taxes on income and other assets respectively (Johnson and Johnson, 2012).

From this balance sheet, it can be noted that Johnson and Johnson lists its assets from the most liquid to the least liquid asset in its portfolio. ReferenceJohnson and Johnson. (2012). Annual Report 2012. Retrieved on January 15, 2014 from: