Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Cash Flow Statement
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Price to Book Value (P/BV) since 2005
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Profitability Ratios (Summary)
Kimberly-Clark Corp., profitability ratios
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
- Gross Profit Margin
- The gross profit margin exhibited fluctuations over the analyzed period. It started at 36.54% in 2016, experienced a slight decline to 35.89% in 2017, followed by a more pronounced drop to 30.28% in 2018. Subsequently, there was a partial recovery, with margins increasing to 32.71% in 2019 and further to 35.64% in 2020. This pattern indicates some volatility but an overall tendency to rebound towards earlier margin levels by the end of the period.
- Operating Profit Margin
- The operating profit margin showed a declining trend from 18.22% in 2016 to 12.06% in 2018, reflecting a notable contraction in operational profitability during this phase. However, improvements followed, with margins rising to 16.21% in 2019 and 16.95% in 2020, indicating a recovery in operating efficiency, though not fully reaching the initial 2016 level.
- Net Profit Margin
- The net profit margin decreased from 11.9% in 2016 to a low of 7.63% in 2018, underscoring a period of reduced overall profitability. Thereafter, a positive turnaround is observed with margins increasing to 11.69% in 2019 and 12.29% in 2020, surpassing the 2016 figure marginally and suggesting a restoration of net profitability.
- Return on Equity (ROE)
- ROE data is incomplete, available only for 2017 and 2020, where it showed exceptionally high values of 362.16% and 375.72% respectively. These unusually elevated figures could indicate the impact of extraordinary items, one-time gains, or significant changes in equity base rather than recurring operational performance, requiring further investigation for clear interpretation.
- Return on Assets (ROA)
- ROA followed a similar trajectory to net profit margin, beginning at 14.83% in 2016, showing a slight increase to 15.04% in 2017, followed by a sharp decline to 9.71% in 2018. It then recovered to 14.11% in 2019, before a minor decrease to 13.42% in 2020. This pattern suggests asset profitability was temporarily impaired but generally improved towards the later years.
Return on Sales
Return on Investment
Gross Profit Margin
Kimberly-Clark Corp., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Procter & Gamble Co. | ||||||
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales showed a generally stable trend from 2016 through 2020, beginning at approximately 18,202 million USD and ending at 19,140 million USD. Minor fluctuations were observed, with a slight increase each year except a marginal dip in 2019. The overall growth over the five-year period was modest, indicating relatively steady revenue generation.
- Gross Profit
- Gross profit exhibited more variability across the period. It started at 6,651 million USD in 2016, then experienced a gradual decline reaching a low point in 2018 at 5,597 million USD. Subsequently, gross profit increased again, recovering to 6,822 million USD by 2020. This pattern suggests that cost management or product mix changes may have influenced profitability, with some periods of pressure followed by improvement.
- Gross Profit Margin
- The gross profit margin declined significantly from 36.54% in 2016 to 30.28% in 2018, before partially rebounding to 35.64% in 2020. The initial reduction in margin aligns with the decrease in gross profit despite relatively stable sales, indicating rising costs or pricing pressures during that period. The recovery in margin toward the end of the timeline suggests improved efficiency or pricing strategies that enhanced profitability relative to sales again.
- Overall Insights
- Despite steady net sales, the fluctuations in gross profit and profit margin point to periods of operational challenges affecting profitability. The nadir in 2018 across profit-related metrics may reflect external or internal factors impacting costs or sales mix. However, the subsequent improvement indicates effective corrective actions. The company's overall financial health in terms of profitability showed resilience with a return to profit margins close to the initial level by 2020.
Operating Profit Margin
Kimberly-Clark Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating profit | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Procter & Gamble Co. | ||||||
| Operating Profit Margin, Industry | ||||||
| Consumer Staples | ||||||
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Operating profit margin = 100 × Operating profit ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales have shown a relatively stable trend over the five-year period, with a slight increase overall. Starting from approximately 18.2 billion US dollars in 2016, the figure experienced minor fluctuations, peaking at around 19.1 billion US dollars in 2020. This indicates steady revenue generation with a modest growth rate despite some year-to-year variations.
- Operating Profit
- Operating profit exhibited a declining trend from 2016 to 2018, dropping from roughly 3.3 billion US dollars in 2016 to about 2.2 billion US dollars in 2018. This decline was followed by a recovery phase, with operating profit rising to nearly 3.0 billion US dollars in 2019 and further increasing to approximately 3.24 billion US dollars in 2020. This pattern suggests challenges affecting profitability in the earlier years, subsequently mitigated by improved operational efficiency or cost control measures in later periods.
- Operating Profit Margin
- The operating profit margin percentage mirrors the trend in operating profit. It declined significantly from 18.22% in 2016 to a low of 12.06% in 2018, indicating reduced profitability relative to sales in that year. The margin then improved to 16.21% in 2019 and slightly further to 16.95% in 2020. Despite the recovery, the margin in 2020 remained below the initial 2016 level, reflecting that while profitability improved, it did not fully return to the highest margin achieved in the period analyzed.
- Overall Analysis
- The data reveals a period of financial pressure around 2018, evidenced by declines in both operating profit and margin despite stable sales. This could suggest increased costs, pricing pressures, or other operational challenges during that year. The subsequent improvement in 2019 and 2020 indicates effective corrective actions, leading to restored profitability levels close to those seen in earlier years, alongside steadily growing sales. The company managed to stabilize its operating performance after a notable dip, albeit with some margin compression compared to the initial year.
Net Profit Margin
Kimberly-Clark Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Kimberly-Clark Corporation | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Procter & Gamble Co. | ||||||
| Net Profit Margin, Industry | ||||||
| Consumer Staples | ||||||
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Net profit margin = 100 × Net income attributable to Kimberly-Clark Corporation ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to Kimberly-Clark Corporation
- The net income exhibited fluctuations over the five-year period. Starting at $2,166 million in 2016, it increased slightly to $2,278 million in 2017. However, in 2018, there was a significant decline to $1,410 million, followed by a recovery to $2,157 million in 2019. The upward trend continued into 2020, reaching the highest value of $2,352 million within the period analyzed.
- Net Sales
- Net sales demonstrated relative stability throughout the years. The values hovered around $18 billion, starting at $18,202 million in 2016 and increasing marginally to $18,259 million in 2017. Sales remained mostly unchanged in 2018 and 2019, with slight decreases and increases respectively, before a more notable rise to $19,140 million in 2020. Overall, net sales showed modest growth over the time frame.
- Net Profit Margin
- The net profit margin reflected the variations observed in net income. It began at 11.9% in 2016 and improved slightly to 12.48% in 2017. A marked decrease occurred in 2018, when the margin dropped to 7.63%, indicating reduced profitability relative to sales. This was followed by a strong recovery in 2019 and 2020, with margins of 11.69% and 12.29% respectively, approaching the levels seen at the beginning of the period.
- Overall Analysis
- The data reflect a general trend of stable sales with some volatility in profitability and net income. The dip in 2018 suggests operational or market challenges during that year, which impacted earnings and profit margins. The recovery in subsequent years indicates effective management responses or improved market conditions, allowing the company to restore profitability close to or above prior levels. The increase in net sales in 2020 further supports the overall positive trend at the end of the period.
Return on Equity (ROE)
Kimberly-Clark Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Kimberly-Clark Corporation | ||||||
| Total Kimberly-Clark Corporation stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Procter & Gamble Co. | ||||||
| ROE, Industry | ||||||
| Consumer Staples | ||||||
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
ROE = 100 × Net income attributable to Kimberly-Clark Corporation ÷ Total Kimberly-Clark Corporation stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income attributable to Kimberly-Clark Corporation shows a generally positive trend over the five-year period. Beginning at $2,166 million in 2016, it increased modestly to $2,278 million in 2017. However, 2018 experienced a significant decline to $1,410 million, indicating a challenging year. The net income then recovered in 2019 to $2,157 million and further increased in 2020 to $2,352 million, reaching the highest level in the period analyzed.
- Total Stockholders’ Equity
- The total stockholders’ equity figures show volatility and unusual values. The equity started at a negative $102,629 million in 2016, further declined to negative $287 million in 2017, and hit a trough of negative $33 million in 2018. A notable positive change occurred in 2019, where stockholders’ equity turned positive to $626 million, maintaining this positive level in 2020. The considerable fluctuation and negative values initially suggest potential accounting anomalies or extraordinary factors impacting equity before stabilization in later years.
- Return on Equity (ROE)
- The ROE percentages were provided only for 2017 and 2020, both reflecting extremely high values of 362.16% and 375.72%, respectively. These exceptionally elevated ROE figures coincide with the periods when stockholders’ equity was negative or very low, which inflates the ratio. This suggests that traditional interpretation of ROE is complicated by the unusual equity position and should be approached with caution in these moments.
- Overall Analysis
- The company's profitability, as indicated by net income, generally improved across the reviewed years despite a dip in 2018. The severe volatility and negative values in total stockholders’ equity raise concerns about the equity base’s stability during the earlier years, which also impacts the reliability and interpretability of ROE. The ROE values are likely distorted and may not reflect the true operational efficiency due to atypical equity figures. Moving forward, the company appears to have restored positive equity levels and strengthened net income, indicating improved financial health by 2020.
Return on Assets (ROA)
Kimberly-Clark Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Kimberly-Clark Corporation | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Procter & Gamble Co. | ||||||
| ROA, Industry | ||||||
| Consumer Staples | ||||||
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
ROA = 100 × Net income attributable to Kimberly-Clark Corporation ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to Kimberly-Clark Corporation
- The net income shows fluctuations over the five-year period. It increased from 2166 million USD in 2016 to a peak of 2278 million USD in 2017. Subsequently, there was a significant decline to 1410 million USD in 2018. The figure rebounded to 2157 million USD in 2019 and further increased to 2352 million USD in 2020, reaching the highest value in the observed period.
- Total Assets
- Total assets demonstrated a steady upward trend with minor fluctuations. Starting at 14602 million USD in 2016, total assets rose to 15151 million USD in 2017, slightly declined to 14518 million USD in 2018, then increased again to 15283 million USD in 2019. A notable growth occurred in 2020, with assets reaching 17523 million USD, indicating expansion in asset base towards the end of the period.
- Return on Assets (ROA)
- ROA percentages correlate with changes in net income relative to total assets. ROA remained relatively stable around 14.83% to 15.04% in 2016 and 2017, reflecting strong profitability. However, it dropped sharply to 9.71% in 2018, which aligns with the decline in net income that year. ROA recovered to 14.11% in 2019 but slightly decreased to 13.42% in 2020 despite increased net income, possibly influenced by the significant rise in total assets.
- Overall Insights
- The financial data indicate the company experienced a temporary setback in profitability in 2018, reflected by lower net income and ROA values. However, both net income and ROA generally recovered in subsequent years. The steady increase in total assets, especially in 2020, suggests strategic investments or asset accumulation. The slight decline in ROA in 2020, despite higher net income, implies that asset growth outpaced income growth, indicating a need to monitor asset utilization efficiency going forward.