Kimberly-Clark Corp. (NYSE:KMB)

Return on Assets (ROA)

The return on assets shows notable variability over the period from 2016 to 2020. It started at 14.83% in 2016 and increased slightly to 15.04% in 2017. However, there was a significant drop to 9.71% in 2018, followed by a recovery to 14.11% in 2019. In 2020, the ROA slightly decreased again to 13.42%. This pattern indicates some fluctuations in the efficiency of asset use to generate profits, with a dip in 2018 that was partially recuperated in the next two years.

Financial Leverage

Financial leverage data is limited, with values provided only for 2017 and 2020. The leverage ratio increased from 24.09 in 2017 to 27.99 in 2020, suggesting a rise in the use of debt relative to equity or assets during this period. The increase in leverage might indicate a higher financial risk or an effort to enhance shareholder returns through increased debt financing.

Return on Equity (ROE)

The return on equity figures are available for 2017 and 2020, showing a high level of return both years. The ROE was 362.16% in 2017 and rose slightly to 375.72% in 2020. These extremely high values often correlate with substantial financial leverage, reflecting strong returns to shareholders, though potentially accompanied by high risk due to the elevated leverage ratio.

Net Profit Margin

The net profit margin exhibited some variability over the five-year period. It started at 11.9% in 2016 and increased slightly to 12.48% in 2017. There was a significant decline in 2018 to 7.63%, indicating reduced profitability during that year. However, this downward trend reversed in the following years, with the margin increasing to 11.69% in 2019 and further to 12.29% in 2020, approaching the earlier levels of profitability.

Asset Turnover

Asset turnover ratios showed a relatively stable pattern with minor fluctuations. Beginning at 1.25 in 2016, the ratio slightly decreased to 1.21 in 2017, then rose to 1.27 in 2018, marking the highest asset utilization during the period. Subsequently, it declined again to 1.21 in 2019 and further to 1.09 in 2020. The general trend suggests a modest decrease in the company’s efficiency in using assets to generate sales by the end of the period.

Financial Leverage

The financial leverage data is incomplete, with values only available for 2017 and 2020. The ratio increased from 24.09 in 2017 to 27.99 in 2020, indicating a rise in the use of debt relative to equity. This suggests a higher financial risk profile and potentially greater reliance on borrowed funds as part of the capital structure by the year 2020.

Return on Equity (ROE)

Return on equity figures were provided only for 2017 and 2020, showing an increase from 362.16% in 2017 to 375.72% in 2020. These extremely high ROE values imply strong profitability relative to shareholders’ equity, although the absence of data for other years limits the ability to assess the full trend. The increase over the recorded years could be related to the heightened financial leverage observed, as increased leverage can amplify ROE.

Tax Burden

The tax burden ratio shows a gradual increase from 0.70 in 2016 to a peak of 0.79 in 2019, followed by a slight decrease to 0.78 in 2020. This indicates a moderate rise in the proportion of pre-tax earnings retained after taxes over the analyzed period.

Interest Burden

The interest burden ratio remains relatively stable, fluctuating narrowly between 0.88 and 0.92 from 2016 to 2020. This consistency suggests that interest expenses relative to earnings before interest and taxes have been effectively managed with minimal volatility.

EBIT Margin

The EBIT margin exhibits a notable decline from 18.72% in 2016 to 11.6% in 2018, followed by a recovery trend with increases to 16.23% in 2019 and 17.14% in 2020. This pattern indicates an initial compression in operating profitability, succeeded by a period of improvement but not reaching the initial higher margins.

Asset Turnover

The asset turnover ratio shows a modest downward trend, starting at 1.25 in 2016, fluctuating slightly through the years, and declining to 1.09 by 2020. This suggests a gradual decrease in the efficiency of utilizing assets to generate sales.

Financial Leverage

Financial leverage data is incomplete but indicates values of 24.09 and 27.99 in 2017 and 2020, respectively. The increase between these points suggests a rising reliance on debt or other forms of leverage to finance assets over the period.

Return on Equity (ROE)

Available ROE figures show exceptionally high values of 362.16% in 2017 and 375.72% in 2020. These significantly elevated returns imply either extraordinary profitability or leverage effects during these years. The absence of data for other years limits a full trend analysis.

The financial data reveals several notable trends in key performance indicators over the five-year period from 2016 to 2020. These indicators include net profit margin, asset turnover, and return on assets (ROA).

Net Profit Margin (%)

The net profit margin exhibited fluctuations during the period. Starting at 11.9% in 2016, it increased slightly to 12.48% in 2017 before experiencing a significant decline to 7.63% in 2018. Subsequently, the margin recovered to 11.69% in 2019 and further increased to 12.29% in 2020. This pattern suggests a period of reduced profitability in 2018, followed by a successful recovery in the following years, nearly reaching previous margin levels by the end of 2020.

Asset Turnover (ratio)

Asset turnover displayed a generally downward trend across the five years. It began at 1.25 in 2016 and showed modest decreases, with 1.21 recorded in both 2017 and 2019, a slight recovery to 1.27 in 2018, before falling to 1.09 in 2020. This decline, particularly in 2020, indicates a reduction in how efficiently the company utilized its assets to generate sales, culminating in its lowest turnover ratio in the observed period.

Return on Assets (ROA) (%)

Return on assets similarly followed a fluctuating but generally declining trend. Starting at 14.83% in 2016, ROA increased marginally to 15.04% in 2017 before dropping significantly to 9.71% in 2018. It partially rebounded to 14.11% in 2019, aligning closely with earlier levels, but decreased again to 13.42% in 2020. These fluctuations mirror the profit margin changes, reflecting the impact of profitability on overall asset returns.

In summary, the data indicate that 2018 was a challenging year with notable declines in both profitability and asset efficiency, as evidenced by net profit margin and ROA decreases. While recovery was observed in 2019, the asset turnover ratio's decline into 2020 suggests some concerns regarding asset utilization efficiency. The company's ability to restore profit margins and asset returns close to prior levels by 2020 reflects resilience, though the lower asset turnover in the latest year points to potential operational inefficiencies or asset base growth outpacing revenue.

Tax Burden

The tax burden ratio demonstrates a gradual increase from 0.70 in 2016 to 0.79 in 2019, followed by a slight decrease to 0.78 in 2020. This indicates a rising proportion of earnings retained after taxes through 2019, with a marginal decline afterward.

Interest Burden

The interest burden ratio remained relatively stable throughout the period, fluctuating narrowly between 0.88 and 0.92. This suggests consistent management of interest expenses relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin experienced a significant decline from 18.72% in 2016 to a low of 11.6% in 2018. Subsequently, it improved steadily, reaching 17.14% by 2020. This pattern reflects a dip in operating profitability mid-period with a notable recovery in the latter years.

Asset Turnover

Asset turnover exhibited a slight decline over the five years, starting at 1.25 in 2016 and decreasing to 1.09 by 2020, with minor fluctuations in between. This indicates a gradual reduction in the efficiency of asset utilization to generate sales.

Return on Assets (ROA)

ROA followed a downward trend from 14.83% in 2016 to a trough of 9.71% in 2018, followed by a recovery to 13.42% in 2020. The pattern correlates closely with the EBIT margin trend, suggesting that changes in operating profitability significantly influenced the return on assets.

Tax Burden

The tax burden ratio exhibited a generally upward trend from 2016 to 2019, increasing from 0.70 to 0.79, indicating a rising proportion of earnings retained after taxes. In 2020, this ratio slightly decreased to 0.78 but remained close to its peak level, suggesting relatively stable tax efficiency during the latter years.

Interest Burden

The interest burden ratio remained fairly consistent throughout the period, fluctuating narrowly between 0.88 and 0.92. This stability suggests that the company maintained a steady ability to cover interest expenses without significant volatility in interest costs relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin showed some variation over the years. It started at 18.72% in 2016, decreased gradually to a low of 11.6% in 2018, and then recovered to 17.14% by 2020. The decline in 2018 may indicate operational challenges or increased costs impacting earnings before interest and taxes, while the subsequent recovery points to improved operational efficiency or revenue management.

Net Profit Margin

Net profit margin followed a similar pattern to the EBIT margin, starting at 11.9% in 2016, dipping to 7.63% in 2018, and then rising again to 12.29% in 2020. This trend suggests that factors beyond operating income, such as tax and interest expenses, did not significantly distort net profitability. Overall, the company regained profitability levels post-2018 downturn.