Arianne Oliveira Tavares; Rodolfo Vieira Nunes

DOI: 10.22167/2675-6528-202600582

Article prepared by the ResumeAI tool, an artificial intelligence solution developed by the Pecege Institute focused on synthesis and writing.

Summary

The global “healthcare” sector presents high economic and financial complexity, characterized by high capital intensity, strong dependence on technological innovation, and diversity of operational models. In this context, the study aimed to analyze how operational and financial strategies influenced the composition of Return on Assets (ROA) and Return on Equity (ROE) in global companies in the sector, through the application of the “DuPont” Model. The research was conducted with a quantitative approach and descriptive nature. Secondary data extracted from the consolidated financial statements of Johnson & Johnson, Siemens Healthineers, and Stryker, for the period from 2021 to 2024, were used. The analysis involved the decomposition of profitability indicators into net margin, asset turnover, and financial leverage multiplier (FLM), in addition to descriptive statistics, Pearson and Spearman correlations, and decomposition of the ROE variation. The results indicated that Johnson & Johnson presented the highest profitability levels, associated with higher margins and lower dispersion. Siemens Healthineers exhibited greater oscillation, with recovery after 2022, while Stryker demonstrated gradual evolution, with growth in asset turnover and reduction in leverage. The decomposition by the “DuPont” Model revealed a greater participation of the net margin in the formation of profitability, with asset turnover acting as a reinforcement and the FLM modulating the intensity of variations. The findings contribute to the understanding of the composition of return in the analyzed sector.

Keywords: Financial leverage; Asset turnover; Net margin; Healthcare sector.

1. Introduction

The global “healthcare” sector has undergone profound transformations throughout history, marked by innovations that redefined its structure and operation. A turning point occurred in 1928 with the discovery of penicillin by Alexander Fleming, which triggered a cycle of scientific and technological advancements. This milestone propelled the transition from a model of artisanal manipulation to a complex industrial structure, characterized by the large-scale production of modern drugs. Pharmaceutical activity, and subsequently the healthcare sector, consolidated through continuous scientific advances and the expansion of technical knowledge, establishing an industry with a high level of sophistication (Stacciarini, 2024; Haque et al., 2024).

Over time, the sector has expanded its scope beyond traditional commercialization, evolving into a comprehensive “healthcare” ecosystem. This evolution is driven by an aging population and the growing need for differentiation among companies, resulting in greater integration of health products, services, and solutions. Organizations incorporate advanced technologies and complex business models, expanding their value generation capacity (Stacciarini, 2024; Petrie, 2025). The economic and financial complexity is intrinsic to this sector, distinguished by high capital intensity, significant investments in research and development [R&D], and dependence on technological advancements. This scenario demands rigorous financial planning and efficient resource management, in addition to constant adaptation to regulations that influence costs, deadlines, and corporate strategies (Damodaran, 2021; Shaikh et al., 2021).

The “healthcare” sector has consolidated itself as one of the main pillars of the global economy, with an estimated annual revenue volume of trillions of dollars. The presence of large multinational corporations contributes to a highly complex competitive environment, where the sustainability of results depends on the ability to combine innovation, operational efficiency, and consistent financial management (Stacciarini, 2024; Bai et al., 2022). Within this scenario, companies such as Johnson & Johnson, Siemens Healthineers, and Stryker illustrate the diversity of strategies adopted, with different levels of investment, market positioning, and capital structure, reflecting choices that directly influence economic-financial performance (Javanmardi et al., 2024).

The assessment of economic-financial performance is crucial in this context. Traditionally, profitability indicators such as Return on Equity [ROE] and Return on Assets [ROA] are used to measure the efficiency in resource utilization and the ability to generate returns. However, the isolated interpretation of these indices limits the understanding of the factors that make up the final result, as it does not reveal the relative participation of operational and financial elements in the formation of profitability (Gitman and Zutter, 2023; Tutcu et al., 2024).

To overcome this limitation, the application of the “DuPont” Model broadens the understanding of performance, allowing the decomposition of ROE and ROA into net profit margin, asset turnover, and financial leverage multiplier. This detailed approach makes it possible to examine how operational decisions, asset utilization, and financing structure interconnect to determine the return obtained by companies. In the “healthcare” sector, this analysis is particularly relevant due to the interaction between high investments, extensive production cycles, and regulatory requirements, factors that directly influence economic-financial performance (Cinaroglu and Pirgaip, 2024). Understanding the composition of profitability is fundamental for managers, investors, and researchers. In this regard, the present study aims to analyze how operational and financial strategies influence the composition of Return on Equity [ROE] and Return on Assets [ROA] in global “healthcare” companies, through the application of the “DuPont” Model, considering the interaction between net profit margin, asset utilization efficiency, and capital structure over the analyzed period.

2. Material and Methods

This research was conducted as a descriptive study, with a quantitative approach, aimed at analyzing the economic-financial performance of global companies in the “healthcare” sector. The adopted design allowed for the observation and recording of the characteristics of the investigated phenomenon, as well as the identification of relationships between variables without direct interference with the object of study (Gil, 2002).

The study sample was composed of three multinational companies in the “healthcare” sector: Johnson & Johnson, Siemens Healthineers, and Stryker. The selection of these companies was based on their economic relevance, representativeness in the sector, and diversity of business models, encompassing pharmaceutical products, medical devices, and diagnostic and treatment technologies.

Only large organizations, with annual revenues exceeding twenty billion dollars in the recent period, were included, ensuring economic relevance in the global context. Consolidated international presence and the availability of standardized and audited financial statements for the analyzed period were also considered (Johnson & Johnson – RI, 2024; Siemens Healthineers – RI, 2024; Stryker – RI, 2024).

The analysis period covered the fiscal years from 2021 to 2024, allowing for the observation of the behavior of economic-financial indicators over time. Secondary data, extracted from the consolidated financial statements disclosed by the companies themselves, were used.

This information was accessed through their annual reports and financial forms, available on the respective Investor Relations [IR] websites, as well as public financial information databases. Data collection occurred on January 20, 2026, directly from official company sources and financial databases.

The choice of these sources ensured the reliability, transparency, and comparability of the information used throughout the study. The temporal delimitation contributed to the consistency of the results and to the comparability between the analyzed periods, without the inclusion of projected data.

For the analysis of economic-financial performance, the “DuPont” methodology was employed, which allows for the decomposition of return measures into fundamental components related to profitability, operational efficiency, and capital structure (Angotti, de Almeida Bispo e Lamounier, 2011). In the development of the study, the “DuPont” Model was applied to the analysis of Return on Assets [ROA] and Return on Equity [ROE].

The main components analyzed were net margin, total asset turnover, and the financial leverage multiplier [FLM]. Net margin was calculated by the ratio between net income and net sales, representing the ability to generate results from revenue.

Asset turnover was obtained by the ratio between net revenue and total assets, indicating efficiency in the use of resources for revenue generation. The MAF was defined as the ratio between total assets and net worth, being used as a measure of the intensity of use of third-party capital.

From these components, ROA was determined as the product between net margin and asset turnover. ROE was obtained by multiplying net margin, asset turnover, and DFL, maintaining coherence with the logic of the “DuPont” Model.

This approach allowed for the identification of each component’s participation in profitability formation and enabled comparison between different companies and periods. The accumulated variation between 2021 and 2024, expressed in percentage points, was also considered, with the objective of measuring the magnitude of changes over the analyzed interval.

Quantitative treatment was performed using descriptive statistical techniques. The mean was used to represent the typical level of the indicators over the period, and the median was considered as a complementary measure to reduce the influence of extreme values.

The dispersion of the indicators was evaluated through the standard deviation and the coefficient of variation, allowing the identification of the relative volatility of returns (Diehl and Tatim, 2014). The joint use of these measures made it possible to evaluate not only the average level of profitability but also the regularity of the results over time.

The relationship between Return on Equity [ROE] and its determinants was investigated through Pearson and Spearman correlation coefficients. Pearson correlation was applied to measure linear association, while Spearman correlation was used to evaluate monotonic relationships, enhancing the robustness of the interpretation of the results.

The ROE variation decomposition was performed by distributing the contributions of the components of the “DuPont” Model, considering net margin, asset turnover, and financial leverage multiplier [FLM]. The calculation was conducted from the average of the marginal contributions, considering different orders of substitution.

This approach made it possible to identify the relative participation of each factor in the formation of the observed changes in shareholder return over the analyzed period. The methodological construction of the study was guided by references that dealt with the analysis of profitability through the decomposition of financial indicators and the comparison between companies.

Authors such as Chang et al. (2013), Bai et al. (2022), Fernandes et al. (2014), Fochi (2018), and Silva (2019) contributed to the definition of the adopted procedures, justifying the application of the “DuPont” Model and the interpretation of its operational and financial components.

3. Results and Discussion

The analysis of the economic-financial performance of Johnson & Johnson, Siemens Healthineers, and Stryker, in the global “healthcare” sector, revealed distinct patterns of profitability and underlying strategies over the period from 2021 to 2024. Initial results, obtained by applying the “DuPont” Model, indicated that Johnson & Johnson consistently presented the highest levels of Return on Assets (ROA) and Return on Equity (ROE), demonstrating a superior ability to generate returns. In contrast, Siemens Healthineers exhibited greater volatility, with a phase of decline followed by a notable recovery, while Stryker maintained a more gradual and consistent evolution, with strategic adjustments over time. This overview sets the stage for an in-depth discussion of the operational and financial factors that shaped each company’s profitability.

Regarding Return on Assets (ROA), Johnson & Johnson started the period in 2021 at 8.4%, reaching its peak in 2022 at 9.8%, and then presenting a reduction to 8.0% in 2023 and 7.8% in 2024. This trajectory suggests robust initial growth, followed by moderation, but remaining at levels higher than those of the other companies analyzed. Siemens Healthineers, in turn, demonstrated a more volatile dynamic, with a drop from 3.7% in 2021 to 2.5% in 2022, followed by an expressive recovery to 5.5% in 2023 and 5.6% in 2024. This behavior indicates greater sensitivity to market or operational factors, with a reconfiguration of the strategy after the period of lower performance. Stryker presented more linear growth, starting from 5.8% in 2021, reaching 6.4% in 2022 and 7.9% in 2023, with a slight retraction to 7.0% in 2024, evidencing progressive evolution and moderate adjustment in the last year.

The analysis of Return on Equity (ROE) reinforces the trends observed in ROA. Johnson & Johnson maintained high levels, with 23.3% in 2021 and 24.0% in 2022, followed by a reduction to 19.4% in 2023 and a slight increase to 19.7% in 2024. This demonstrates the company’s strong ability to generate returns for its shareholders, even with the reduction after the 2022 peak. Siemens Healthineers exhibited the largest fluctuation, with a drop from 10.4% in 2021 to 6.8% in 2022, followed by significant growth to 15.0% in 2023 and a slight reduction to 14.6% in 2024. This trajectory indicates a consistent change in performance after a period of lower returns. Stryker presented an intermediate behavior, with growth from 13.4% in 2021 to 14.2% in 2022 and 17.0% in 2023, followed by a reduction to 14.5% in 2024, maintaining an expansionary trajectory until 2023 and an adjustment in the final period. The comparison between ROA and ROE in each company also suggests distinct capital structures and leverage levels, with Johnson & Johnson showing a greater difference between the indicators, which points to a greater capacity to amplify shareholder returns.

The decomposition of the “DuPont” Model allowed for a detailed analysis of the components influencing profitability: net margin, asset turnover, and financial leverage multiplier (FLM). Johnson & Johnson’s net margin showed high values at the beginning of the period, with 17.8% in 2021 and 22.6% in 2022, reducing to around 15% in 2023 (15.6%) and 2024 (15.8%). This profit generation capability, even with adjustments, remained superior to the others. Siemens Healthineers, on the other hand, recorded lower margins, at 8.2% in 2021 and 5.2% in 2022, but demonstrated a significant recovery to 10.6% in 2023 and 10.8% in 2024, indicating an improvement in operational performance. Stryker exhibited continuous growth in net margin until 2023, from 11.7% in 2021 to 15.4% in 2023, with a subsequent reduction to 13.2% in 2024, reflecting a progressive advancement in profit generation before the final adjustment.

Regarding asset turnover, which measures the efficiency in using resources to generate revenue, the companies showed distinct behaviors. Johnson & Johnson showed a more pronounced variation, with a drop in 2022 and recovery in 2023, followed by a slight decrease in 2024, suggesting changes in the intensity of asset utilization over time. Siemens Healthineers exhibited a continuous growth trajectory of asset turnover until 2023, remaining stable in 2024, indicating a consistent improvement in the ability to generate revenue from its assets. Stryker, in turn, demonstrated continuous evolution throughout the entire period, with progressive growth until 2024, pointing to a constant increase in operational efficiency associated with the use of its assets. This diversity of patterns reflects each company’s different strategic approaches in managing its operational resources.

The financial leverage multiplier (FLM), which reflects the intensity of the use of third-party capital, showed a downward trend in all companies throughout the analyzed period, albeit with varying intensities. Johnson & Johnson presented a decrease in FLM between 2021 and 2023, followed by a slight increase in 2024, indicating an adjustment in capital structure after a period of deleveraging. Siemens Healthineers demonstrated a continuous reduction in FLM over the four years, suggesting a gradual decrease in reliance on third-party capital. Stryker exhibited the most consistent reduction in FLM, with a progressive drop in all years, evidencing a continuous strategy of reducing financial leverage. This observation is crucial for understanding how companies manage their financial risk and capital composition, directly impacting shareholder return.

The descriptive statistics of the profitability indicators provided a deeper insight into the stability and variability of performance. For ROA, Johnson & Johnson recorded an average of 8.49% and a median of 8.18%, with a standard deviation of 0.90% and a coefficient of variation (CV) of 10.58%, indicating low dispersion and stability. Siemens Healthineers presented an average of 4.29% and a median of 4.57%, with a standard deviation of 1.50% and a CV of 34.89%, characterizing high dispersion and instability. Stryker had an average of 6.76% and a median of 6.68%, with a standard deviation of 0.92% and a CV of 13.63%, indicating an intermediate level of dispersion and relative stability. These data corroborate the observation that Johnson & Johnson maintains consistent leadership in profitability and predictability, while Siemens Healthineers faces greater volatility in its operational results.

Regarding ROE, Johnson & Johnson obtained an average of 21.59% and a median of 21.46%, with a standard deviation of 2.41% and a CV of 11.15%, which points to stability at high levels of return to shareholders. Siemens Healthineers presented an average of 11.71% and a median of 12.51%, with a standard deviation of 3.86% and a CV of 32.93%, indicating high variability and amplitude in results. Stryker registered an average of 14.78% and a median of 14.35%, with a standard deviation of 1.56% and a CV of 10.59%, demonstrating more consistent behavior compared to Siemens Healthineers. The comparison between the indicators reinforces the differences in the consistency of the results, with Johnson & Johnson presenting higher averages and lower dispersion, while Siemens Healthineers exhibits lower averages and greater variability, and Stryker occupies an intermediate position with more regular returns.

The correlation analysis between ROE and its components, using Pearson and Spearman coefficients, revealed that ROA and net margin presented high and positive coefficients, close to 0.95 for Pearson and 0.88 for Spearman. This strong association indicates a stable and consistent relationship between these variables and ROE, regardless of the measurement method. The proximity of the values between the two statistical methods reinforces that the behavior of ROE consistently follows the variation of these two components, without relevant changes when analyzed under different statistical approaches. This alignment suggests the predominance of operational and result-generating elements as the main vectors associated with shareholder return, as pointed out by Gitman and Zutter (2023).

On the other hand, asset turnover and MAF showed coefficients close to zero, with negative signs in both methods and high p-values, indicating an absence of consistent association with ROE over the period. The low magnitude of the coefficients, along with the similarity between Pearson and Spearman, suggests that there is no clear trend of relationship, neither linear nor monotonic, positioning these variables as elements with less influence on the structure of the observed profitability formation. This distinction in the strength of correlations is fundamental to understanding that, although all components of the “DuPont” Model contribute to ROE, net margin and ROA exert a significantly greater impact on the determination of shareholder return, while asset turnover and MAF play more secondary or modulating roles.

The exact decomposition of the ROE variation between 2021 and 2024 revealed the specific contributions of each component. For Johnson & Johnson, the negative variation of -3.58 percentage points in ROE resulted from a configuration where the net margin contributed -2.52 percentage points and the financial leverage contributed -1.99 percentage points, while asset turnover acted in the opposite direction with a positive contribution of 0.93 percentage points. This distribution indicates that the ROE reduction was not caused by a single dominant factor, but by a combination of loss of efficiency in profit generation and decrease in leverage, the sum of which overcame the compensatory effect of asset turnover. At Siemens Healthineers, the positive variation of 4.20 percentage points in ROE was driven by the net margin (+3.46 p.p.) and asset turnover (+1.74 p.p.), while financial leverage showed a negative contribution of -0.99 p.p., acting as a partial restraint on growth. This configuration demonstrates that ROE growth is concentrated in operational components, with a predominance of margin, accompanied by a consistent increase in asset utilization efficiency.

Stryker, with a 1.10 percentage point variation in ROE, presented an intermediate configuration. The net margin contributed 1.79 percentage points and the asset turnover 0.87 percentage points, while the MAF showed a negative contribution of -1.56 percentage points. This distribution highlights that ROE growth depends on a more sensitive balance between positive and negative components, as the reduction in leverage absorbed a relevant portion of operational gains, resulting in a more moderate final variation. The cross-sectional interpretation among companies allows for the observation of three distinct configurations in ROE variation formation: retraction with multiple negative vectors (Johnson & Johnson), expansion with a predominance of operational factors (Siemens Healthineers), and growth conditioned by internal compensations (Stryker). The net margin assumes a larger share in all companies, while asset turnover acts as a complementary element and the MAF presents a predominantly negative behavior, indicating a deleveraging movement over the period.

The research results indicate that Johnson & Johnson maintained the highest levels of ROA and ROE throughout the analyzed period, with superior net margins and lower dispersion in the indicators. This regularity in profit generation and greater financial stability, even after the reduction observed from 2022 onwards, reinforces its capacity to sustain high performance in a complex sectoral environment, characterized by high capital intensity and continuous innovation (Stacciarini, 2024). The lower variability in Johnson & Johnson’s economic-financial indicators suggests greater predictability in results, stemming from efficiency in converting revenue into profit, which aligns with literature highlighting the importance of stability for performance sustainability (Santos et al., 2024).

Siemens Healthineers, in turn, showed the greatest fluctuation among the companies, with a downward trend in 2022 followed by a recovery in 2023 and maintenance in 2024. This dynamic, marked by lower net margin values at the beginning of the series and a higher MAF, suggests a profitability formation with greater participation of financial leverage. The subsequent recovery of ROA and ROE was linked to operational improvement, with simultaneous advancement of margin and asset turnover, composing a distinct profile compared to the other companies. This more volatile trajectory, with alternation between retraction and growth, is consistent with environments subject to greater operational and financial sensitivity, which tend to produce indicators with greater variation over time (Pereira and Martins, 2022).

Stryker demonstrated gradual growth in indicators until 2023, followed by an adjustment in 2024, maintaining an intermediate position in the panel. The highlight on the continuous advancement of asset turnover, which reached the highest value in the panel last year, and the progressive reduction of MAF, indicate a return formation based on operational improvement and lower dependence on leverage. This combination of increased asset efficiency, margin expansion until 2023, and decreased relative use of third-party capital suggests a more balanced trajectory supported by operational fundamentals, according to literature associating high profitability with operational gains combined with reduced financial leverage (Adam et al., 2023). Stryker’s evolution, therefore, reflects a strategy of operational efficiency and intensive asset utilization.

In summary, the application of the “DuPont” Model revealed that the net margin exerted the greatest influence on the formation of profitability and the variation of ROE in all analyzed companies, while asset turnover acted as a reinforcing mechanism for operational movements. The financial leverage multiplier (FLM), in turn, modulated the intensity of variations, often with a negative contribution reflecting the reduction in leverage. The highest correlations of ROE with ROA and net margin, combined with the exact decomposition of shareholder return variation, indicate that profit generation capacity was the main factor responsible for changes in profitability ratios. The differences observed between companies did not arise solely from the level of return obtained, but from the way margin, operational efficiency, and capital structure combined over the period, responding to the objective of analyzing how operational and financial strategies influence the composition of ROE and ROA in the “healthcare” sector.

4. Conclusion

This study sought to analyze how operational and financial strategies influenced the composition of Return on Assets (ROA) and Return on Equity (ROE) in global “healthcare” sector companies, through the application of the “DuPont” Model. It was found that Johnson & Johnson maintained the highest profitability levels between 2021 and 2024, associated with superior net margins and lower indicator dispersion, which indicated a consistent profit generation capacity. Siemens Healthineers exhibited greater fluctuation, with a downturn in 2022 and subsequent recovery, accompanied by a higher financial leverage multiplier at the beginning of the period. Stryker, on the other hand, demonstrated gradual evolution, with asset turnover growth and progressive reduction in financial leverage, positioning itself in an intermediate profitability range with greater regularity. The decomposition by the “DuPont” Model revealed that the net margin exerted the greatest influence on profitability formation and ROE variation in all companies, while asset turnover acted as a reinforcement and the financial leverage multiplier modulated the intensity of variations, often with a negative contribution that reflected the reduction in leverage.

These findings contribute to the understanding that performance differences in the “healthcare” sector were not limited to the return level, but to how margin, operational efficiency, and capital structure combined over the analyzed period. However, the study presented limitations arising from the exclusive use of secondary data, the sample restricted to three companies, and the temporal scope of four fiscal years, in addition to not incorporating qualitative management variables. For future research, it is suggested to expand the sample and the historical series, incorporate complementary indicators such as liquidity and cash generation, and combine the “DuPont” decomposition with qualitative approaches for a deeper understanding of the relationships between strategy, profitability, and capital structure.

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