Kimberly-Clark Corporation (KMB)

Kimberly-Clark Corp.'s liquidity ratios show a mixed performance over the past five years. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has fluctuated between 0.73 and 0.82. While the current ratio is below 1 for most years, indicating that current liabilities exceed current assets, it has shown some improvement in recent years.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has ranged from 0.47 to 0.54. This suggests that Kimberly-Clark may have difficulty in meeting its short-term obligations using only its most liquid assets.

The cash ratio, which focuses solely on cash and cash equivalents to cover current liabilities, has increased over the years from 0.15 to 0.23. This indicates that the company has improved its ability to pay off immediate obligations with cash on hand.

Overall, Kimberly-Clark Corp. may face challenges in meeting its short-term financial obligations based on its liquidity ratios. Management should closely monitor these ratios and consider strategies to enhance liquidity, such as optimizing working capital management and cash flow generation.

---

See also:

Kimberly-Clark Corporation Liquidity Ratios

---

Additional liquidity measure

Kimberly-Clark Corp.'s cash conversion cycle fluctuated over the past five years. In 2023, the company's cash conversion cycle was negative at -8.11 days, indicating that it was able to convert its inventory into cash much faster than previous years. This significant improvement could suggest more efficient management of inventory and quicker collection of accounts receivable. In 2022, the cash conversion cycle was positive at 0.87 days, but still relatively efficient. However, in 2021 and 2020, the company had negative cash conversion cycles again, indicating efficient management of working capital.

In 2019, Kimberly-Clark Corp. had a cash conversion cycle of 7.58 days, showing that it took longer to convert its inventory into cash compared to recent years. Overall, the trend over the five-year period suggests that the company was able to effectively manage its working capital to improve its cash conversion cycle, indicating efficient utilization of resources.