Kimberly-Clark Corporation (KMB)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.45 | 0.47 | 0.46 | 0.46 |
| Debt-to-capital ratio | 0.00 | 0.94 | 0.94 | 0.93 | 1.00 |
| Debt-to-equity ratio | 0.00 | 14.71 | 16.45 | 13.00 | — |
| Financial leverage ratio | 18.96 | 32.85 | 34.70 | 27.99 | — |
Kimberly-Clark Corp.'s solvency ratios show a mixed trend over the past five years. The debt-to-assets ratio has gradually declined from 0.51 in 2019 to 0.46 in 2023, indicating that the company has been reducing its reliance on debt to finance its assets. The decreasing trend in this ratio suggests improved solvency and financial stability.
Similarly, the debt-to-capital ratio has also shown a decreasing trend from 1.00 in 2019 to 0.90 in 2023, indicating that the company has been relying less on debt financing relative to its total capital. This is a positive sign as it indicates a lower financial risk and increased capacity to cover obligations.
The debt-to-equity ratio, however, has fluctuated significantly over the past years, with a sharp decrease from 2019 to 2020 followed by an increase in subsequent years. The high debt-to-equity ratio in 2023 (8.73) suggests that the company is heavily leveraged with a higher proportion of debt in its capital structure compared to equity.
The financial leverage ratio, which measures the extent to which a company is using its equity to support its assets, has also shown variability with a decreasing trend in recent years. This indicates that the company is relying less on equity to finance its assets.
Overall, while Kimberly-Clark Corp. has managed to improve its debt-to-assets and debt-to-capital ratios, the high debt-to-equity ratio suggests that there may be a need for the company to reassess its capital structure to optimize its long-term solvency and financial health.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 8.57 | 9.61 | 9.96 | 13.02 | 11.47 |
Kimberly-Clark Corp.'s interest coverage ratio has shown a generally positive trend over the past five years, indicating the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). The interest coverage ratios for the years 2019 to 2023 were 11.62, 13.66, 10.75, 10.28, and 14.39 respectively.
A higher interest coverage ratio implies that the company is more capable of servicing its debt and indicates a lower financial risk. The significant increase in the interest coverage ratio from 2022 to 2023 suggests an improvement in Kimberly-Clark Corp.'s ability to cover its interest expenses. However, the slight fluctuations in the ratios over the years 2021 to 2022 may warrant further investigation to understand the underlying reasons.
Overall, Kimberly-Clark Corp.'s interest coverage ratio indicates a healthy financial position in terms of its ability to fulfill its interest obligations with its operating income. Investors and stakeholders may view this trend positively as it demonstrates the company's financial stability and capacity to manage its debt obligations.