Kimberly-Clark Corporation (KMB)
Cash conversion cycle
| 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 |
| Cash conversion cycle | days | -17.09 | -8.22 | 0.87 | -2.05 | 0.16 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 51.64 + 36.56 – 105.29
= -17.09
The cash conversion cycle of Kimberly-Clark Corporation has shown fluctuations over the past five years. In 2020, the company had a very efficient cash conversion cycle of 0.16 days, indicating a quick turnover of cash through its operations. However, in 2021, the cycle significantly decreased to -2.05 days, suggesting that the company was able to convert its investments into cash even faster, potentially due to improved inventory management or quicker collection of receivables.
By 2022, the cash conversion cycle increased to 0.87 days, indicating a slight delay in the conversion of investments to cash compared to the previous year. This uptick may have been influenced by extended payment terms to suppliers or a slowdown in collections.
In 2023, the cycle experienced a significant decline to -8.22 days, signifying a notable improvement in cash conversion efficiency. The negative cycle suggests that the company was able to convert investments into cash before paying suppliers or incurring the costs of production, reflecting strong working capital management.
Most recently, by December 31, 2024, the cash conversion cycle decreased even further to -17.09 days, indicating an exceptional ability to convert investments into cash. This suggests that Kimberly-Clark Corporation has been highly effective in managing its working capital, potentially through streamlining operations, maximizing cash flow, and optimizing inventory levels.
Overall, the trend of the cash conversion cycle for Kimberly-Clark Corporation demonstrates a mix of efficiency and improvement in working capital management over the years, with the company achieving increasingly negative cycles, reflecting a strong position in liquidity and operational effectiveness.
Peer comparison
Dec 31, 2024