Kimberly-Clark Corporation (KMB)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.45 | 0.46 | 0.45 | 0.47 | 0.46 |
| Debt-to-capital ratio | 0.90 | 0.90 | 0.94 | 0.94 | 0.93 |
| Debt-to-equity ratio | 8.86 | 8.72 | 14.71 | 16.45 | 13.00 |
| Financial leverage ratio | 19.70 | 18.96 | 32.85 | 34.70 | 27.99 |
The solvency ratios of Kimberly-Clark Corporation indicate the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: This ratio shows the proportion of the company's assets financed by debt. Kimberly-Clark's Debt-to-assets ratio has remained relatively stable over the past five years, ranging between 0.45 and 0.47. This suggests that approximately 45% to 47% of the company's assets are funded by debt.
2. Debt-to-capital ratio: This ratio measures the percentage of the company's capital that is funded by debt. Kimberly-Clark's Debt-to-capital ratio has been consistent over the years, ranging between 0.90 and 0.94. This indicates that around 90% to 94% of the company's capital structure is financed by debt.
3. Debt-to-equity ratio: This ratio indicates the extent to which the company is leveraging its equity. Kimberly-Clark's Debt-to-equity ratio has shown fluctuations, starting at 13.00 in 2020, peaking at 16.45 in 2021, and decreasing to 8.72 in 2023 and 8.86 in 2024. A lower debt-to-equity ratio generally signifies lower financial risk and reliance on debt financing.
4. Financial leverage ratio: This ratio evaluates the company's financial risk by comparing its total assets to its equity. Kimberly-Clark's Financial leverage ratio has also seen fluctuations, from 27.99 in 2020 to 19.70 in 2024. A decreasing trend in this ratio indicates a reduction in financial risk and increased stability in the company's capital structure.
Overall, Kimberly-Clark Corporation's solvency ratios reflect a stable financial position with a balanced mix of debt and equity financing over the years. The decreasing trends in certain ratios demonstrate a potential strengthening of the company's financial stability and reduced reliance on debt.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 12.52 | 8.57 | 9.61 | 9.96 | 13.02 |
Based on the provided data, Kimberly-Clark Corporation's interest coverage ratio has shown a decreasing trend over the years. The interest coverage ratio was 13.02 as of December 31, 2020, indicating that the company's operating income was able to cover its interest expense approximately 13 times. However, by December 31, 2024, the interest coverage ratio decreased to 12.52.
A decreasing trend in the interest coverage ratio suggests that Kimberly-Clark Corporation's ability to meet its interest obligations from its operating income has slightly weakened over the years. Despite the decline, the company's interest coverage remains relatively healthy, indicating that it still generates sufficient earnings to cover its interest expenses comfortably.
It is important for investors and analysts to continue monitoring Kimberly-Clark Corporation's interest coverage ratio to assess its financial health and ability to meet debt obligations in the future.