Kimberly-Clark Corporation (KMB)

Liquidity ratios

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 0.80 0.82 0.78 0.82 0.80
Quick ratio 0.43 0.47 0.37 0.37 0.39
Cash ratio 0.15 0.16 0.06 0.04 0.05

Kimberly-Clark Corporation's liquidity ratios demonstrate a mixed performance over the past five years. Firstly, the current ratio, which measures the company's ability to meet short-term obligations with its current assets, has shown a slight fluctuation, with values ranging from 0.78 to 0.82. The current ratio remained below the ideal industry standard of 1, indicating potential challenges in covering short-term liabilities with current assets.

Secondly, the quick ratio, a more stringent liquidity measure that excludes inventory from current assets, also exhibited variability but generally stayed low, with values ranging from 0.37 to 0.47. This suggests that Kimberly-Clark may face difficulties in meeting immediate obligations without relying on selling inventory.

Lastly, the cash ratio, which reflects the company's ability to pay off current liabilities using cash and cash equivalents, showed a notable improvement from 0.04 in 2021 to 0.15 in 2024. This indicates that Kimberly-Clark's cash position has strengthened over time, enhancing its ability to cover short-term liabilities solely with cash resources.

In conclusion, while Kimberly-Clark's cash position has improved, its overall liquidity position, as reflected by the current and quick ratios, remains relatively weak. The company may need to focus on managing its current assets more efficiently to enhance its liquidity and meet short-term obligations effectively.


See also:

Kimberly-Clark Corporation Liquidity Ratios


Additional liquidity measure

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days -17.09 -8.22 0.87 -2.05 0.16

Kimberly-Clark Corporation's cash conversion cycle has shown significant improvement over the years based on the provided data. In 2020, the company's cash conversion cycle was positive at 0.16 days, indicating that it took a short period to convert its investments in raw materials and production into cash from sales.

However, the trend shifted in the subsequent years, with negative values indicating an efficient cash conversion cycle. By 2024, Kimberly-Clark Corporation's cash conversion cycle had improved significantly to -17.09 days, reflecting that the company was able to convert its investments into cash from sales at a much faster rate, potentially indicating effective working capital management and strong operational efficiency.