Kimberly-Clark Corporation (KMB)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.82 | 0.84 | 0.87 | 0.82 | 0.78 | 0.78 | 0.79 | 0.81 | 0.82 | 0.78 | 0.77 | 0.77 | 0.80 | 1.00 | 0.91 | 0.87 | 0.73 | 0.75 | 0.81 | 0.73 |
| Quick ratio | 0.47 | 0.46 | 0.45 | 0.42 | 0.37 | 0.37 | 0.39 | 0.41 | 0.37 | 0.42 | 0.41 | 0.38 | 0.44 | 0.65 | 0.53 | 0.54 | 0.39 | 0.40 | 0.45 | 0.40 |
| Cash ratio | 0.16 | 0.12 | 0.09 | 0.07 | 0.06 | 0.05 | 0.04 | 0.07 | 0.04 | 0.09 | 0.09 | 0.05 | 0.09 | 0.30 | 0.22 | 0.15 | 0.06 | 0.06 | 0.08 | 0.07 |
Based on the liquidity ratios of Kimberly-Clark Corp., there are some key observations to be made:
1. Current Ratio: The current ratio measures the company's ability to meet its short-term obligations with its current assets. A current ratio below 1 indicates potential liquidity issues. Kimberly-Clark's current ratio has fluctuated between 0.78 and 0.87 in the past eight quarters, with the latest ratio at 0.82 in Q4 2023. This suggests that the company may be facing challenges in meeting its short-term liabilities with its current assets.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. A quick ratio below 1 may indicate difficulty in meeting immediate obligations without relying on selling inventory. Kimberly-Clark's quick ratio has ranged from 0.46 to 0.55 over the past eight quarters, with the latest ratio at 0.54 in Q4 2023. While slightly higher than the current ratio, the quick ratio still indicates potential liquidity concerns for the company.
3. Cash Ratio: The cash ratio is the most conservative liquidity measure as it only considers cash and highly liquid assets against current liabilities. A cash ratio below 0.2 may suggest a limited ability to cover short-term obligations without liquidating other assets. Kimberly-Clark's cash ratio has varied between 0.13 and 0.23 in the past eight quarters, with the latest ratio at 0.23 in Q4 2023. This indicates that the company has improved its ability to cover short-term liabilities with its cash and equivalents.
Overall, the liquidity ratios of Kimberly-Clark Corp. paint a picture of mixed liquidity performance. While the cash ratio has shown improvement, the current and quick ratios remain at levels below the ideal benchmarks, indicating potential challenges in meeting short-term obligations without relying on further asset liquidation or financing.
See also:
Kimberly-Clark Corporation Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -8.21 | 1.33 | 0.12 | 2.56 | 0.90 | 6.62 | 8.08 | 4.74 | -2.16 | 5.68 | 9.59 | 6.87 | 0.14 | 4.81 | 2.95 | 9.58 | 7.58 | 11.87 | 14.79 | 13.52 |
The cash conversion cycle of Kimberly-Clark Corp. fluctuated over the past eight quarters, indicating varying efficiency in managing cash flow. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In Q4 2023, the company experienced a negative cash conversion cycle of -8.11 days, indicating that it received cash from sales before having to pay its suppliers and other obligations. This could imply efficient management of working capital and strong sales collection practices during the period.
Conversely, in Q3 2022, Kimberly-Clark had a cash conversion cycle of 8.09 days, suggesting that the company took more time to convert its investments into cash flow. This scenario could signal challenges in managing inventory levels, delayed collections from customers, or extended payment terms with suppliers.
The company's overall trend in the cash conversion cycle demonstrates some volatility, which could be influenced by factors such as seasonal demand, competitive pressures, or changes in operational efficiency. Monitoring this metric closely can provide insights into the company's ability to generate cash and manage working capital effectively.