Kimberly-Clark Corporation (KMB)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 53.38 | 59.34 | 60.93 | 56.39 | 52.63 |
| Days of sales outstanding (DSO) | days | 38.20 | 41.25 | 41.52 | 42.62 | 44.77 |
| Number of days of payables | days | 99.74 | 99.72 | 104.50 | 98.85 | 89.82 |
| Cash conversion cycle | days | -8.16 | 0.87 | -2.05 | 0.16 | 7.58 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 53.38 + 38.20 – 99.74
= -8.16
The cash conversion cycle of Kimberly-Clark Corp. has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle was negative at -8.11 days, indicating that it took fewer days for the company to convert its investments in raw materials into cash from sales. This significant decrease from the previous year's positive cycle of 0.87 days suggests an improvement in the efficiency of its working capital management.
In 2022, the company managed a positive cash conversion cycle of 0.87 days, meaning that it took slightly over a day to convert its investments in inventory to cash from sales. This represented an increase from the negative cycle of -2.00 days in 2021, reflecting a slight slowdown in the company's ability to efficiently manage its working capital.
The positive cycle of 0.16 days in 2020 indicates that Kimberly-Clark Corp. continued to effectively convert its investments in inventory into cash from sales, albeit at a slower rate compared to the previous years. This was a significant drop from the cycle of 7.58 days in 2019, suggesting a substantial improvement in the management of its working capital efficiency.
Overall, the company's cash conversion cycle has shown varying trends over the years, with fluctuations between positive and negative cycles. The recent negative cycle in 2023 highlights a strong performance in working capital management, while the positive cycles in previous years indicate a need for continuous monitoring and optimization of the cash conversion process to enhance overall efficiency.
Peer comparison
Dec 31, 2023