Kimberly-Clark Corporation (KMB)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	7.07	6.84	6.15	5.99	6.47
Receivables turnover	9.98	9.57	8.85	8.79	8.56
Payables turnover	3.47	3.66	3.66	3.49	3.69
Working capital turnover	—	—	—	—	—

Kimberly-Clark Corporation's activity ratios indicate the efficiency of the company in managing its inventory, receivables, and payables.

1. Inventory Turnover: The inventory turnover ratio decreased slightly from 6.47 in 2020 to 5.99 in 2021 but then improved consistently to reach 7.07 in 2024. This improvement suggests that the company is selling its inventory more efficiently, with goods being sold and replaced quicker over the years.

2. Receivables Turnover: The receivables turnover ratio increased steadily from 8.56 in 2020 to 9.98 in 2024. This indicates that Kimberly-Clark is collecting its receivables more frequently, reflecting effective credit management and timely collection of outstanding payments from customers.

3. Payables Turnover: The payables turnover ratio fluctuated over the years, ranging from 3.47 in 2024 to 3.69 in 2020. Despite the fluctuations, the ratios remained relatively stable, indicating the company's consistent approach in managing its payment obligations to suppliers.

4. Working Capital Turnover: The data provided did not include the working capital turnover ratio for Kimberly-Clark Corporation. This ratio is useful in assessing how effectively the company utilizes its working capital to generate sales. The absence of this data prevents a comprehensive analysis of the company's working capital efficiency.

Overall, Kimberly-Clark Corporation's activity ratios show positive trends in inventory turnover and receivables turnover, reflecting improved efficiency in managing inventory and collecting payments from customers. While the payables turnover ratio remained relatively stable, the company's overall activity ratios demonstrate effective management of key operational aspects.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	51.64	53.38	59.34	60.93	56.39
Days of sales outstanding (DSO)	days	36.56	38.14	41.25	41.52	42.62
Number of days of payables	days	105.29	99.74	99.72	104.50	98.85

Based on the provided data for Kimberly-Clark Corporation, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- In 2020, the company held its inventory for an average of 56.39 days before it was sold.
- This number increased to 60.93 days in 2021, decreased slightly to 59.34 days in 2022, dropped further to 53.38 days in 2023, and decreased again to 51.64 days in 2024.
- A decreasing trend in DOH indicates that the company is managing its inventory more efficiently over the years.

2. Days of Sales Outstanding (DSO):
- In 2020, it took the company an average of 42.62 days to collect its accounts receivable.
- This number improved to 41.52 days in 2021, further decreased to 41.25 days in 2022, dropped to 38.14 days in 2023, and decreased again to 36.56 days in 2024.
- A decreasing trend in DSO signifies that the company is collecting its receivables more promptly over the years.

3. Number of Days of Payables:
- The company took an average of 98.85 days to pay its suppliers in 2020.
- This number increased to 104.50 days in 2021, slightly decreased to 99.72 days in 2022, remained relatively stable at 99.74 days in 2023, and increased again to 105.29 days in 2024.
- An increasing trend in the number of days of payables suggests that the company is taking longer to pay its suppliers.

Overall, the trends in these activity ratios indicate that Kimberly-Clark Corporation has been managing its inventory and accounts receivable efficiently over the years, but it has been extending the time it takes to pay its suppliers, which may have working capital implications. Efficient management of these activity ratios is crucial for maintaining a healthy balance between liquidity and profitability.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	2.67	2.58	2.56	2.40	2.38
Total asset turnover	1.21	1.18	1.12	1.09	1.09

Kimberly-Clark Corporation's long-term fixed asset turnover ratio has shown a consistent increasing trend over the five-year period from 2020 to 2024, indicating improved efficiency in its utilization of fixed assets. The ratio has increased from 2.38 in 2020 to 2.67 in 2024, suggesting that the company is generating more sales revenue for each dollar invested in fixed assets.

Similarly, the total asset turnover ratio has also been on the rise, suggesting that Kimberly-Clark is becoming more efficient in generating sales revenue from its total assets. The total asset turnover ratio has increased from 1.09 in 2020 to 1.21 in 2024, reflecting the company's ability to generate more sales relative to its total asset base.

Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Kimberly-Clark Corporation is effectively managing its assets to drive sales growth and improve operational efficiency over the long term.