Kimberly-Clark Corp. (NYSE:KMB)

Raw Materials

The value of raw materials exhibited a generally increasing trend over the period, starting at 329 million US dollars in 2016 and reaching 394 million US dollars in 2020. A slight decline occurred in 2019, when the value decreased to 321 million US dollars, before recovering in 2020 to its highest level in the period.

Work in Process

Work in process inventory showed a mild fluctuation but with a slight overall decline by the end of the period. It began at 203 million US dollars in 2016, peaked at 214 million in 2018, and then dwindled to 189 million in 2020, indicating a reduction in in-progress goods toward the final years.

Finished Goods

Finished goods inventory demonstrated a steady upward pattern, increasing from 1030 million US dollars in 2016 to 1202 million US dollars in 2020. The yearly increments suggest consistent growth in stockpiled finished products.

Supplies and Other

This category exhibited a downward trend, with values starting at 280 million US dollars in 2016 and gradually decreasing to 263 million US dollars by 2020. The decline suggests a reduction in miscellaneous supply inventories over time.

Inventories Determined on FIFO or Weighted-Average Cost Methods

Inventories measured by FIFO or weighted-average cost methods increased overall from 1842 million US dollars in 2016 to 2048 million US dollars in 2020. The trend indicates a growth in total inventory values when valued by these cost methods despite minor dips in 2019.

Excess of FIFO or Weighted-Average Cost over LIFO Cost

The excess value recorded a general decrease in absolute terms from -163 million US dollars in 2016 to -145 million in 2020, with some fluctuations. This narrowing gap may indicate a reduction in the cost differential between these inventory valuation methods.

Total Inventories

The total inventories, presumably valued using the LIFO method, increased from 1679 million US dollars in 2016 to 1903 million US dollars in 2020. Despite minor fluctuations, this upward movement reflects an overall growth in inventory levels across the reported periods.

The financial data over the five-year period reveals several noteworthy trends and adjustments related to reported versus inventory LIFO reserve adjusted figures.

Inventories

Reported inventories rose gradually from US$1,679 million in 2016 to US$1,903 million in 2020. The adjusted inventories, accounting for the LIFO reserve, were consistently higher each year, increasing from US$1,842 million in 2016 to US$2,048 million in 2020. This adjustment reflects the impact of inventory valuation using the LIFO method, indicating an upward trend in inventory values when measured on an adjusted basis.

Current Assets

Reported current assets experienced modest fluctuations, starting at US$5,115 million in 2016, peaking slightly at US$5,211 million in 2017, and finishing at US$5,174 million in 2020. The adjusted current assets were uniformly higher, ranging from US$5,278 million in 2016 to US$5,319 million in 2020, demonstrating consistency with the inventory adjustments and a relatively stable current asset base overall.

Total Assets

Reported total assets showed some volatility but ultimately increased from US$14,602 million in 2016 to US$17,523 million in 2020, reflecting asset growth over the period. The adjusted total assets were consistently higher than reported figures due to inventory adjustments, increasing from US$14,765 million in 2016 to US$17,668 million in 2020. This consistent adjustment suggests that inventory valuation under LIFO can materially influence total asset valuation.

Stockholders’ Equity

Reported stockholders’ equity exhibited significant fluctuations, initially reported as a negative US$102 million in 2016, transitioning to positive US$629 million in 2017, then declines followed by gains, ending at US$626 million in 2020. The adjusted equity figures were higher and more stable overall, starting at US$61 million in 2016 and peaking at US$805 million in 2017, with some variability in subsequent years but improving to US$771 million by 2020. This pattern indicates that inventory adjustments have a substantial effect on equity calculations, reducing volatility and improving the perceived financial position.

Net Income Attributable to Kimberly-Clark Corporation

Reported net income demonstrated variability, with a peak of US$2,278 million in 2017 and a low of US$1,410 million in 2018, recovering to US$2,352 million in 2020. The adjusted net income aligns closely with reported figures but is marginally lower or higher in certain years due to the effect of adjustments. The consistency between reported and adjusted net income suggests that inventory accounting methods have a limited impact on profitability measures compared to balance sheet items.

Overall, the data reveals that inventory LIFO reserve adjustments significantly affect balance sheet items such as inventories, current assets, total assets, and stockholders' equity by increasing their reported amounts and smoothing out volatility. However, the adjustments have a minimal impact on income statement results, particularly net income. This implies that inventory valuation methods play a crucial role in asset and equity presentation but are less influential on reported earnings trends over this period.

The analysis of the financial data reveals several key trends in liquidity, profitability, asset efficiency, and leverage over the five-year period.

Current Ratio

Both reported and adjusted current ratios exhibit a general downward trend from 2016 to 2019, indicating a decline in short-term liquidity. Specifically, the reported current ratio decreased from 0.87 in 2016 to a low of 0.73 in 2019, before slightly recovering to 0.80 in 2020. The adjusted current ratio follows a similar pattern, starting at 0.90 in 2016, dipping to 0.75 in 2019, and then improving to 0.83 in 2020. The adjustment for inventory LIFO reserve slightly enhances the current ratio each year, reflecting a more favorable liquidity position when inventory valuation adjustments are considered.

Net Profit Margin

The net profit margin shows volatility over the period. Both reported and adjusted margins peak near 12.5% in 2017, decline significantly to around 7.6-7.7% in 2018, and rebound strongly in 2019 and 2020 to exceed 11%. The adjusted margins closely track the reported values with minor differences, suggesting that the LIFO reserve adjustment has minimal impact on profitability percentage metrics.

Total Asset Turnover

Total asset turnover ratios remain relatively stable, fluctuating slightly but generally trending downwards from 1.25 in 2016 (reported) to 1.09 in 2020. Adjusted ratios align closely with reported figures across the years, indicating consistent efficiency in asset utilization despite slight declines. The decreasing trend suggests reduced sales generated per dollar of assets over time.

Financial Leverage

Financial leverage ratios present irregular and inconsistent data across periods, with reported figures available only for 2017 and 2020 (24.09 and 27.99, respectively) and adjusted figures showing a wide range from 19.04 in 2017 to 242.05 in 2016 and 126.54 in 2019. The exceptionally high adjusted leverage in 2016 and 2019 may indicate data anomalies or extraordinary balance sheet circumstances impacting leverage measurement after inventory adjustments. Generally, however, leverage appears high, suggesting substantial use of debt or liabilities relative to equity, but the inconsistency limits definitive conclusions.

Return on Equity (ROE)

ROE data is incomplete with only 2016, 2017, 2019, and 2020 values available for adjusted and partial data for reported ROE. Adjusted ROE shows extremely high values, notably 3518.03% in 2016, 284.6% in 2017, and 1738.52% in 2019, then declining to 303.76% in 2020. Such elevated figures may reflect unusual accounting effects or capital structure factors following LIFO reserve adjustments rather than operational performance. This volatility complicates interpretations, though there is a visible overall downward trend after the initial peak.

Return on Assets (ROA)

ROA exhibits a pattern of decline with some recovery. Reported ROA decreases from 14.83% in 2016 to 9.71% in 2018, rebounds to 14.11% in 2019, and slightly declines again to 13.42% in 2020. Adjusted ROA mirrors this trend closely, indicating that asset profitability experienced a dip mid-period but improved towards the end. The alignment of reported and adjusted ROA suggests limited impact from LIFO reserve adjustments on overall asset returns.

In summary, liquidity ratios declined until 2019 before modest improvement, while profitability and asset turnover showed volatility with some recovery at the end of the period. Leverage and equity return metrics display irregular values with marked volatility, indicating possible effects of accounting adjustments or structural changes. Overall, the LIFO reserve adjustments have limited effects on ratio trends except in leverage and ROE, where data irregularities suggest the need for cautious interpretation.

The data presents an overview of both reported and inventory LIFO reserve adjusted figures for current assets and current ratios over the period from 2016 to 2020.

Current Assets:

Reported current assets exhibit a slight fluctuation, starting at 5,115 million US dollars in 2016, increasing to a peak of 5,211 million in 2017, followed by a decline to 5,041 million in 2018, and relatively stable values in 2019 and 2020 around 5,057 million and 5,174 million respectively.

Adjusted current assets, which factor in inventory LIFO reserve adjustments, consistently exceed the reported figures each year. They start at 5,278 million in 2016, rise to 5,387 million in 2017, decrease to 5,232 million in 2018, then remain relatively stable at 5,212 million in 2019, and finally increase to 5,319 million in 2020.

Current Ratios:

The reported current ratio shows a declining trend from 0.87 in 2016 to a low of 0.73 in 2019, indicating a potential decrease in short-term liquidity during this period. There is a modest recovery to 0.8 in 2020.

The adjusted current ratio follows a similar pattern but consistently remains higher than the reported current ratio due to inventory adjustments. It starts at 0.9 in 2016, decreases steadily to 0.75 in 2019, and rises to 0.83 in 2020.

Overall, both the reported and adjusted current assets show minor fluctuations with a general stability toward the end of the period, while current ratios, both reported and adjusted, decline until 2019 before improving in 2020. The LIFO reserve adjustment consistently enhances the current asset and current ratio metrics, suggesting that inventory valuation under LIFO has a notable impact on the company's reported liquidity position.

The data reveals fluctuations in both reported and adjusted net income attributable to Kimberly-Clark Corporation over the five-year period from 2016 to 2020. Initially, there is a moderate increase in reported net income from 2166 million US dollars in 2016 to 2278 million in 2017. However, a significant decline is observed in 2018, with reported net income dropping sharply to 1410 million. This decline is followed by a recovery in 2019 and further growth in 2020, reaching 2352 million US dollars, the highest in the period.

Adjusted net income mirrors this pattern closely, starting at 2146 million US dollars in 2016 and rising slightly to 2291 million in 2017. The notable dip in 2018 to 1425 million demonstrates the persistence of the downward trend, although the adjusted figure is marginally higher than the reported net income for that year. Subsequent years show a rebound with adjusted net income increasing to 2121 million in 2019 and 2342 million in 2020, closely tracking the reported figures.

The reported net profit margin follows a similar trajectory. It increases from 11.9% in 2016 to 12.48% in 2017, reflecting improving profitability. The margin then decreases substantially to 7.63% in 2018, suggesting reduced efficiency or increased costs impacting profitability. The margin recovers to 11.69% in 2019 and further improves to 12.29% in 2020, consistent with the trends seen in net income.

The adjusted net profit margin also reveals a comparable trend. Starting slightly lower than the reported margin at 11.79% in 2016, it rises to 12.55% in 2017 before falling to 7.71% in 2018. The adjustment results in a marginally higher margin than reported figures in 2018. The adjusted margin then climbs to 11.5% in 2019 and 12.24% in 2020, indicating a recovery in profitability after the dip.

Income Trends

The period saw a pronounced dip in both reported and adjusted net income in 2018, followed by a consistent recovery in the subsequent two years, culminating in the highest income levels in 2020.

Profit Margin Trends

Net profit margins, both reported and adjusted, declined sharply in 2018 but recovered to levels surpassing those of 2016 by 2020, indicating improvement in operational efficiency or cost management.

Adjusted vs Reported Figures

Adjusted net income and profit margins are consistently close to reported figures, with minor enhancements observed during the downturn year of 2018, suggesting inventory-related adjustments slightly mitigate reported performance impacts.

The financial data over the five-year period reveals several notable trends regarding total assets and asset turnover ratios, including adjustments for the LIFO reserve on inventory.

Total Assets

Reported total assets show a fluctuating but generally increasing trend, beginning at 14,602 million US dollars in 2016 and peaking at 17,523 million US dollars in 2020. There is a decline observed in 2018 relative to the previous year, followed by steady growth in the subsequent years.

Adjusted total assets, which account for the LIFO reserve adjustment, follow a similar pattern, starting at 14,765 million US dollars in 2016 and growing to 17,668 million US dollars by 2020. The adjustment consistently adds a modest amount to the reported assets, reflecting the inventory valuation impact over the years.

Total Asset Turnover

The reported total asset turnover ratio shows a declining trend over the period. Initially, it starts at 1.25 in 2016, experiences slight fluctuations, but gradually decreases to 1.09 by 2020. This indicates a reduction in revenue generated per dollar of assets held, suggesting lower efficiency in asset utilization over time.

The adjusted total asset turnover ratio, which incorporates the LIFO reserve effects, mirrors the reported turnover ratio trend closely. It starts at 1.23 in 2016 and declines to 1.08 in 2020, reiterating the declining pattern in asset utilization efficiency when considering adjusted asset values.

Insights

The increase in total assets, both reported and adjusted, alongside the decreasing asset turnover ratios, may suggest that while the company is investing in or accumulating more assets, the efficiency in using these assets to generate revenue is diminishing.

The LIFO reserve adjustments have a consistent but relatively small impact on total assets and asset turnover ratios, indicating moderate effects on the overall financial structure due to the inventory valuation method.

These trends could be indicative of strategic shifts in asset management, operational challenges, or changes in market conditions impacting the company's efficiency over the analyzed period.

The financial data over the five-year period reveals several notable trends related to asset levels, equity positions, and leverage ratios after adjustments for inventory LIFO reserves.

Total Assets

Both reported and adjusted total assets display a generally increasing trend from 2016 through 2020. Reported total assets rose from $14,602 million in 2016 to $17,523 million in 2020, showing a steady increase except for a slight dip in 2018. Adjusted total assets, which account for inventory LIFO reserve adjustments, track similarly but remain consistently higher than the reported values, highlighting the impact of such inventory accounting adjustments. The adjusted total assets increased from $14,765 million in 2016 to $17,668 million in 2020.

Stockholders’ Equity

The reported stockholders’ equity figures exhibit considerable volatility and are mostly negative or close to zero, indicating potential concerns with net equity under reported values. Specifically, reported equity moves from a negative of $102 million in 2016 to a positive $626 million in 2020, with significant fluctuations in intervening years including a deep negative in 2018 (-$287 million). In contrast, the adjusted stockholders’ equity, which reflects the LIFO reserve corrections, presents a more stable and generally positive picture. The adjusted equity began at $61 million in 2016, dipped slightly negative in 2018 (-$96 million), but increased consistently afterward, reaching $771 million by 2020. This contrast suggests that adjustments for inventory accounting positively influence the interpretation of the company's net equity.

Financial Leverage

Financial leverage ratios show irregular availability but significant variation between reported and adjusted values. Reported leverage data are sparse but indicate an upward movement from 24.09 (no specified year for 2016) to 27.99 in 2020, suggesting increased reliance on debt relative to equity in recent years. Adjusted financial leverage ratios, reflecting LIFO reserve adjustments, are available for four of the five years and display considerable volatility: a very high 242.05 in 2016, a notable decrease to 19.04 in 2017, then a large spike again to 126.54 in 2019, before reducing to 22.92 in 2020. The pronounced fluctuations could be due to adjustments in equity values derived from inventory accounting, which greatly affect the leverage ratio denominator. Generally, the adjusted ratios suggest periods of both heightened and moderated leverage exposure over time.

The analysis of the reported and inventory LIFO reserve adjusted financial data reveals several notable trends and fluctuations across the examined periods.

Net Income

The reported net income attributable to the corporation fluctuates throughout the five years, starting at $2,166 million in 2016, increasing to $2,278 million in 2017, dropping significantly to $1,410 million in 2018, then recovering to $2,157 million in 2019 and reaching a peak of $2,352 million in 2020. The adjusted net income follows a similar trajectory with slightly different values, indicating that adjustments for inventory LIFO reserves slightly affect the net income figures but do not change the overarching trend.

Stockholders' Equity

Reported total stockholders' equity shows extreme volatility with negative values in 2016 (-$102 million), 2017 (-$629 million), 2018 (-$287 million), and 2019 (-$33 million), but a significant positive spike to $626 million in 2020. The adjusted total stockholders' equity values are consistently higher than the reported values, showing a positive $61,805 million in 2016, negative $96 million in 2017, and increasing to $122 million in 2018 and $771 million in 2020, with some inconsistency in 2019 due to missing data. This indicates that adjustments for inventory impacts considerably influence the equity figures, highlighting potential valuation or reporting differences.

Return on Equity (ROE)

The reported ROE data is sparse with extremely high values reported in 2017 (362.16%) and 2020 (375.72%), with missing data for other years. These elevated percentages suggest unusual equity values affecting the ratio calculation. The adjusted ROE percentages are also exceptionally high, especially in 2016 (3518.03%) and 2019 (1738.52%), with a general declining trend from 2016 to 2020 (303.76%), reflecting the impact of adjusting for inventory reserves on profitability metrics relative to equity. The extreme values imply that the unique circumstances of stockholders' equity figures heavily influence the ROE calculations.

Overall, the data demonstrates considerable volatility in both net income and stockholders' equity measurements over the years, compounded by significant differences between reported and adjusted figures. The adjustments for inventory LIFO reserves have a measurable impact on equity and return on equity calculations, suggesting they are critical for a nuanced understanding of the company's financial health and performance trends over the period analyzed.

The financial data reveals several notable trends and insights over the five-year period from 2016 to 2020.

Net Income

Both reported and adjusted net income exhibited fluctuations during the period. Reported net income peaked at $2,278 million in 2017, then experienced a significant decline to $1,410 million in 2018. Following this decline, net income increased again, reaching $2,352 million in 2020, the highest value recorded within the period. Adjusted net income mirrored this pattern closely, with a peak of $2,291 million in 2017, a drop to $1,425 million in 2018, and a subsequent rise to $2,342 million in 2020. The consistency between reported and adjusted figures suggests that inventory LIFO reserve adjustments had minimal impact on net income totals.

Total Assets

Reported total assets increased from $14,602 million in 2016 to $17,523 million in 2020, showing steady growth overall despite a slight decline in 2018. Adjusted total assets, which include LIFO reserve adjustments, followed a similar upward trend, increasing from $14,765 million in 2016 to $17,668 million in 2020. The adjustment resulted in consistently higher asset values throughout all years. This positive asset growth indicates expansion or asset acquisition during the period.

Return on Assets (ROA)

Reported ROA highest values were close in 2016 and 2017, at 14.83% and 15.04% respectively, followed by a sharp decrease to 9.71% in 2018. The ratio then improved over the next two years, reaching 13.42% in 2020. Adjusted ROA displayed similar trends but was slightly lower than reported ROA in all years, ranging from 14.53% in 2016 to 13.26% in 2020. The decline in ROA during 2018 correlates with the reduction in net income and slight decrease in asset base, while the subsequent recovery aligns with rising net income and asset growth. The marginally lower adjusted ROA reflects the increased asset base when accounting for LIFO reserve adjustments.