Kimberly-Clark Corp. (NYSE:KMB)

The financial data reveals notable trends over the five-year period from 2016 to 2020 concerning total assets and stockholders’ equity, both reported and goodwill adjusted.

Total Assets

Reported total assets demonstrate an overall upward trajectory, rising from US$14,602 million at the end of 2016 to US$17,523 million by the end of 2020. Although there is a slight dip observed in 2018, the general trend is growth, with the largest single-year increase occurring between 2019 and 2020.

Adjusted total assets, which exclude goodwill, exhibit a similar pattern, beginning at US$13,122 million in 2016 and increasing to US$15,628 million by 2020. The adjusted figures are consistently lower than the reported totals, reflecting the exclusion of goodwill. Despite minor fluctuations, the adjusted assets steadily increase over the period, indicating underlying asset growth beyond intangible assets.

Stockholders’ Equity

Reported stockholders’ equity shows considerable volatility during the reviewed period. Starting at a negative value of US$-102 million in 2016, it improves substantially to US$629 million in 2017 before declining again to negative territory in 2018 and 2019, reaching US$-287 million and US$-33 million respectively. There is a significant recovery by 2020, with equity rising sharply to US$626 million. This pattern suggests uneven financial performance or changes in equity structure over the years.

In contrast, the adjusted stockholders’ equity, excluding goodwill, remains persistently negative each year, starting at US$-1,582 million in 2016 and improving gradually to US$-1,269 million in 2020. Although the negative values lessen slightly over time, the persistent negativity highlights ongoing deficiencies or adjustments that affect the core equity base after goodwill is removed.

Overall, the data indicates asset growth both inclusive and exclusive of goodwill, demonstrating expansion in the company's asset base. However, stockholders’ equity figures reveal fluctuations and a structural challenge in the core equity position when goodwill is adjusted out. This mixed performance in equity metrics may warrant deeper examination into underlying factors such as intangible asset valuations, liabilities, and retained earnings to better understand the company’s financial stability.

The analysis of the financial data reveals several notable trends in operational efficiency and profitability over the examined five-year period.

Total Asset Turnover

The reported total asset turnover ratio shows a generally declining trend, beginning at 1.25 in 2016 and decreasing to 1.09 by 2020. This suggests a gradual reduction in the efficiency with which the company utilizes its assets to generate revenue. In contrast, the goodwill-adjusted total asset turnover is consistently higher than the reported figures, starting at 1.39 in 2016 and declining to 1.22 in 2020. Although adjusted turnover is higher, it also follows a similar downward trajectory, indicating that even after adjusting for goodwill, asset utilization efficiency has diminished over time.

Financial Leverage

The available reported financial leverage data points are limited but indicate an increase from 24.09 at the end of 2016 to 27.99 in 2020. This increase in leverage suggests a growing reliance on debt financing or other liabilities relative to equity, which may affect the company’s financial risk profile. There are no adjusted financial leverage figures reported to provide further insight into leverage excluding goodwill considerations.

Return on Equity (ROE)

Reported ROE values provided for 2017 and 2020 are exceptionally high, at 362.16% and 375.72%, respectively. These unusually elevated ROE percentages could reflect extraordinary events, significant financial leverage impact, or accounting impacts during these years. The lack of ROE data for other years and absence of adjusted ROE data limits a comprehensive trend assessment, but the existing numbers highlight extremely high profitability or financial return relative to equity during the periods shown.

Return on Assets (ROA)

Reported ROA decreased from 14.83% in 2016 to a low of 9.71% in 2018, before recovering somewhat to 13.42% in 2020. This trend suggests variability in asset profitability, with 2018 being a comparatively weaker year. The adjusted ROA follows a similar pattern but consistently presents higher values than the reported ROA, starting at 16.51% in 2016 and ending at 15.05% in 2020. This indicates that when goodwill is excluded, the company’s asset base generates better returns, implying that goodwill adjustments improve the perceived asset profitability.

In summary, while operational efficiency as measured by asset turnover has declined over the period, asset profitability remains relatively strong, particularly when adjusted for goodwill. The increasing financial leverage observed could suggest enhanced risk exposure, which may partly explain the extraordinary ROE figures reported in certain years. Further detailed analysis would benefit from more consistent and complete data on leverage and equity returns.

The analysis of the available financial data over the five-year period reveals distinct trends in both reported and adjusted total assets alongside their respective asset turnover ratios.

Total Assets

The reported total assets increased from US$14,602 million in 2016 to US$17,523 million in 2020, indicating a general upward trend in asset size. However, there was a dip observed in 2018 to US$14,518 million before rising again in subsequent years. Adjusted total assets show a similar trajectory, starting at US$13,122 million in 2016 and rising steadily to US$15,628 million in 2020, with a slight decrease in 2018. The adjusted figures consistently remain lower than the reported amounts, reflecting the exclusion of goodwill or intangible assets in the adjustment process.

Total Asset Turnover

Reported total asset turnover exhibited a declining trend from 1.25 in 2016 to 1.09 in 2020, suggesting a decrease in efficiency in using assets to generate revenue. The turnover ratio slightly fluctuated but showed a clear downward movement overall. Adjusted total asset turnover also declined from 1.39 in 2016 to 1.22 in 2020 but remained higher than the reported turnover, indicative of a better asset utilization measure when excluding goodwill.

Insights

The increase in asset base over time coupled with a decline in asset turnover ratios implies that while the company expanded its asset holdings, the efficiency in generating revenue from these assets has decreased. The consistent discrepancy between reported and adjusted figures suggests that goodwill significantly impacts the asset base, and its exclusion provides a more conservative view of asset productivity.

The analysis of the financial data over the five-year period reveals several notable trends in asset levels and equity positions, alongside limited information on leverage metrics.

Total Assets

The reported total assets display a generally upward trajectory, beginning at approximately 14,602 million US dollars in 2016 and reaching 17,523 million by the end of 2020. This reflects an overall growth in asset base despite minor fluctuations, such as a slight decrease from 2017 to 2018. The adjusted total assets, which exclude goodwill effects, demonstrate a similar upward trend, increasing from about 13,122 million in 2016 to 15,628 million in 2020. The progression of adjusted assets closely parallels that of reported assets, indicative of steady asset growth when goodwill is factored out.

Stockholders' Equity

The reported total stockholders’ equity reveals considerable variability and volatility across the reviewed years. Starting from a slightly negative position of -102 million in 2016, the equity position swings notably, dropping further to -287 million in 2018 before recovering to positive territory at 626 million in 2020. The pattern suggests fluctuations in retained earnings or other equity components during the period.
The adjusted stockholders’ equity, which removes goodwill influences, remains consistently negative throughout the period. Although the magnitude of negative equity diminishes from -1,582 million in 2016 to -1,269 million in 2020, the persistent deficit indicates underlying challenges in the net asset position once intangible assets are excluded.

Financial Leverage

Available data is limited for financial leverage. The reported financial leverage ratio is recorded as 24.09 in 2017 and increases to 27.99 in 2020, signifying a rising reliance on debt or liabilities relative to equity during this period. No data is provided for other years or for adjusted financial leverage, thereby curtailing a more comprehensive analysis of leverage trends.

In summary, the company shows a pattern of asset growth both in reported and adjusted terms, with fluctuations in the reported equity moving from negative values toward recovery by 2020. The adjusted equity remains negative but improves slightly. The limited leverage data suggests increased leverage over time, warranting further investigation once complete data becomes available.

Stockholders' Equity (Reported)

The reported total stockholders' equity exhibited significant volatility over the observed periods. It started at a negative value of -102,629 million US dollars in 2016, sharply decreasing to -287 million in 2017, indicating a substantial improvement in equity position. However, by 2018, equity again turned more negative to -33,626 million, reflecting a considerable decline. No data for 2019 is presented, but in 2020, the value improved markedly to -33,626 million. This pattern illustrates inconsistency with fluctuations between periods, suggesting potential financial or operational challenges impacting equity values.

Stockholders' Equity (Adjusted for Goodwill)

Adjusted total stockholders' equity, accounting for goodwill, also remained negative throughout the five-year timeframe but showed a gradual improvement. Starting at -1,582 million in 2016, the figure improved to -947 million in 2017. Despite a setback in 2018 to -1,761 million, the adjusted equity regained ground over the next two years, reaching -1,269 million by 2020. This trend indicates that goodwill adjustments further emphasize a negative equity position but hint at some recovery or better asset management over time.

Return on Equity (Reported)

Reported Return on Equity (ROE) values were available for 2017 and 2020, with exceptionally high percentages: 362.16% in 2017 and 375.72% in 2020. The extremely elevated ROE suggests distortions likely due to negative or low equity bases, which inflates the ratio beyond typical operational performance levels. The absence of ROE data in other years limits comprehensive trend analysis but the available figures imply unusual financial dynamics possibly related to equity structure changes.

Return on Equity (Adjusted)

No adjusted ROE data is available, preventing analysis of profitability after accounting for goodwill effects. The absence of this metric limits insight into the company’s adjusted profitability efficiency over the reported periods.

Total Assets

The reported total assets demonstrate a moderate upward trend from 2016 to 2020, increasing from 14,602 million US dollars in 2016 to 17,523 million US dollars in 2020. Despite a slight decline in 2018, the overall growth suggests asset expansion, potentially through acquisitions or organic growth. The adjusted total assets, which exclude goodwill, follow a similar trajectory but at a consistently lower level, indicating the presence and variation of goodwill on the balance sheet over the years. Adjusted total assets increased from 13,122 million US dollars in 2016 to 15,628 million US dollars in 2020, reflecting similar growth dynamics with a slight dip in 2018.

Return on Assets (ROA)

The reported ROA exhibits notable volatility, beginning at 14.83% in 2016 and peaking slightly in 2017 at 15.04%, before dropping significantly to 9.71% in 2018. The figure recovered in 2019 to 14.11%, then experienced a minor decline to 13.42% in 2020. This variability could indicate fluctuations in net income relative to the asset base across the periods. Adjusted ROA, which accounts for asset values excluding goodwill, shows a corresponding pattern but at higher percentages. It starts at 16.51% in 2016 and rises modestly to 16.78% in 2017, declines to 10.81% in 2018, then rebounds to 15.61% in 2019 and slightly decreases to 15.05% in 2020. The consistently higher adjusted ROA compared to reported ROA suggests that goodwill may be diminishing the perceived efficiency of asset use in generating returns.

Insights

The comparison between reported and adjusted figures underscores the impact of goodwill on asset valuation and profitability metrics. The decline in ROA in 2018 across both reported and adjusted measurements coincides with a dip in total assets, indicating possible operational challenges or restructuring impacts during that year. The subsequent recovery in 2019 and relative stability in 2020 point to improved asset utilization or profitability. The consistent difference between reported and adjusted figures highlights the need to consider goodwill adjustments to better assess the company’s true performance and asset productivity over time.