Kimberly-Clark Corp. (NYSE:KMB)

Return on Assets (ROA)

The ROA demonstrates a generally fluctuating trend over the observed periods. Beginning at 14.8% in March 2017, it experienced a slight decline reaching 9.71% by December 2018. Post this low point, ROA recovered steadily, climbing back to a peak of 15.82% in June 2020 before gradually moderating to 13.21% by March 2021. This pattern indicates a period of contraction in asset profitability followed by a significant rebound and subsequent stabilization.

Financial Leverage

Financial leverage shows considerable variability and some data gaps. Initial values in early 2017 were markedly high, starting at 108.51 and peaking at 147.75 in June 2017, before experiencing a sharp decline to 24.09 in December 2017. Several quarters lack data, but within available data points from late 2019 to early 2021, leverage ratios generally ranged between 27.99 and 60.35, indicating moderate leverage with some episodic changes. The data suggest the company has managed to reduce and stabilize its financial leverage compared to the early high values.

Return on Equity (ROE)

ROE exhibits extreme volatility in the periods with available data. The initial quarters of 2017 saw extraordinarily high ROE levels, notably 2106.86% in June 2017 and 1605.88% in March 2017, followed by a sharp decline through 2017 to 362.16% in December 2017. Data for 2018 and several quarters thereafter are missing. From late 2019 onwards, ROE remains elevated but with a marked downward trend from 954.85% in September 2020 to 375.72% in December 2020, then fluctuating near 439.38% by March 2021. These large swings indicate significant fluctuations in equity profitability, possibly linked to changes in leverage or episodic extraordinary items.

Summary

The data reflects a company experiencing notable shifts in profitability and financial structure over the reported quarters. Asset profitability decreased initially but later recovered and stabilized, while equity profitability showed extreme volatility with extraordinarily high values in some periods, which is atypical for standard operations and may warrant further investigation. Financial leverage was initially very high but decreased substantially and appears to have stabilized at more moderate levels. Overall, while ROA presents a return to consistent performance after a dip, the highly volatile and elevated ROE suggests underlying factors significantly influencing shareholder returns, potentially related to financial leverage or other accounting effects.

Net Profit Margin

The net profit margin exhibited a generally fluctuating but overall declining trend from early 2017 through late 2018, decreasing from around 12.0% to approximately 7.6%. This was followed by a recovery phase beginning in 2019, where margins rose steadily, reaching a peak near 13.6% in mid-2020. After this peak, the margin showed a slight downward correction but remained above 12% through the first quarter of 2021.

Asset Turnover

Asset turnover remained relatively stable in the 1.20 to 1.27 range from 2017 through 2019, which indicates consistent efficiency in generating revenue from assets during that period. A gradual decline began in 2020, dropping to about 1.09 by the first quarter of 2021, suggesting a reduction in asset efficiency or increased asset base not fully contributing to revenue.

Financial Leverage

Financial leverage figures showed significant volatility. Early data from 2017 indicate extremely high leverage ratios, often exceeding 100, before dropping sharply by the end of 2017 to below 50. Leverage data is missing for some periods, but available values suggest a moderate leverage level fluctuating between about 27 and 60 from mid-2020 to early 2021. This suggests a move toward more conservative financing with reduced reliance on debt or obligations over time.

Return on Equity (ROE)

ROE exhibited extremely high and volatile values in 2017, with percentages reaching above 2000% at times, followed by a marked decrease toward the end of that year. Subsequent data are limited but indicate a general trend of reduction from the previously unsustainable highs to more moderate levels between approximately 375% and 954% during 2020 and early 2021. While still elevated, the ROE figures point to improved equity returns relative to the earlier extreme volatility, reflecting a possible normalization or adjustment in financial and operational efficiencies.

Overall Insights

The company experienced pronounced fluctuations in profitability and financial structure during the analyzed period. Early years were characterized by volatile leverage and ROE alongside moderate net profit margins and stable asset turnover. From 2019 onwards, profit margins improved significantly, supported by more stable leverage levels and a gradual decrease in asset turnover. The data suggest efforts toward financial stabilization and improved profitability in recent years, although asset utilization efficiency requires attention as indicated by the downward trend in asset turnover.

The financial analysis reveals several key trends and insights regarding the company's performance over the examined periods.

Tax Burden

The Tax Burden ratio has shown a gradual increase from 0.70 in early 2017 to a more stable range around 0.78-0.79 from 2019 onward. This suggests a consistent effective tax rate with slight improvement in tax efficiency over time.

Interest Burden

The Interest Burden ratio remains relatively steady, fluctuating narrowly between 0.88 and 0.93 throughout the entire period. This indicates stable interest expense relative to earnings before interest and taxes, implying consistent debt servicing costs without significant changes.

EBIT Margin

The EBIT Margin shows a clear downward trend from about 18.85% in early 2017 to a low point around 11.6% by the end of 2018. However, starting in 2019, there is a noticeable recovery, with margins improving to over 17% by late 2020 and early 2021. This pattern suggests initial margin compression possibly due to cost pressures or operational challenges, followed by a successful margin restoration phase.

Asset Turnover

Asset Turnover has demonstrated slight variability but generally a declining tendency, particularly from 1.23 in early 2017 down to near 1.09-1.10 in early 2021. This indicates that the company's efficiency in generating sales from its assets has weakened over time, potentially reflecting increased asset base or reduced revenue generation efficiency.

Financial Leverage

Financial Leverage data is incomplete but shows high volatility where reported. Initial figures indicate extremely high leverage ratios (e.g., 147.75 in mid-2017 and 108.51 in early 2017) followed by lower and less volatile ratios in 2020-2021, around 27.99 to 60.35. This points to significant fluctuations in the company's use of debt or equity financing during the sample periods, with a trend toward moderation in recent quarters.

Return on Equity (ROE)

ROE exhibits extreme variability and very high values in 2017, reaching over 2100% at its peak, then falling sharply to mid hundreds and lower in subsequent years. Although the later figures still reflect robust returns (ranging roughly from 375% to 955%), the marked fluctuations and outlier spikes suggest unusual financial leverage effects or one-time items influencing equity returns. The declining volatility and stabilization after 2019 indicate improved consistency in generating shareholder returns.

In summary, the company faced margin pressures and efficiency declines through 2018, followed by recovery in profitability and more stable leverage and equity returns in later years. Despite some data gaps, the overall trajectory suggests improved operational control and financial steadiness entering 2021.

Net Profit Margin

The net profit margin exhibited a declining trend from early 2017 through the end of 2018, decreasing from approximately 12% to a low near 7.6%. This reduction suggests increasing cost pressures or reduced pricing power during that period. Beginning in 2019, the net profit margin improved steadily, reaching above 13.5% in mid-2020, before slightly moderating but remaining above 12% into early 2021. This recovery indicates enhanced profitability, possibly due to cost control measures or improved revenue quality.

Asset Turnover

Asset turnover ratios remained relatively stable around 1.2 to 1.27 from 2017 through 2019, indicating consistent efficiency in utilizing assets to generate sales. However, starting in 2019, there was a gradual decline, falling below 1.1 by early 2021. This downward trend suggests a decrease in operational efficiency or slower revenue growth relative to asset base expansion or impairment.

Return on Assets (ROA)

ROA mirrored the general patterns observed in profitability margins. Initially, it declined from near 15% in 2017 to below 10% by late 2018, highlighting diminished overall return from asset investments. From 2019 onwards, ROA showed a significant rebound, climbing back above 15% by mid-2020, yet experienced a slight dip thereafter, settling around 13% in early 2021. This fluctuating pattern aligns with profit margin and asset turnover dynamics, indicating periodic challenges followed by recovery in asset efficiency and profitability.

Tax Burden

The tax burden ratio exhibited a gradual increase over the examined periods, rising from approximately 0.70 in early 2017 to a consistent level near 0.79 from early 2020 onwards. This indicates a slightly higher proportion of pre-tax earnings retained after tax in the more recent years, reflecting a marginal improvement in tax efficiency or changes in tax obligations.

Interest Burden

The interest burden ratio remained relatively stable throughout the periods, fluctuating narrowly between 0.88 and 0.93. This suggests consistent management of interest expenses relative to earnings before interest and taxes, maintaining a steady capacity to cover interest obligations.

EBIT Margin

The EBIT margin experienced a decline from the first quarter of 2017 through to the end of 2018, descending from approximately 18.85% to a low around 11.6%. However, from early 2019 onwards, the margin recovered progressively, peaking near 18.63% in mid-2020 before stabilizing slightly above 16% in early 2021. This pattern indicates initial pressure on operating profitability followed by a strong recovery and subsequent stabilization.

Asset Turnover

Asset turnover demonstrated minor fluctuations but a general decreasing trend over the analyzed timeframe. Starting near 1.23 in early 2017, the ratio held relatively steady around 1.2 through most of 2018 and 2019, then declined gradually to approximately 1.09 in late 2020 before a slight uptick to 1.10 in early 2021. This suggests a reduction in asset utilization efficiency as time progressed.

Return on Assets (ROA)

ROA followed a pattern roughly paralleling the EBIT margin. It declined from about 14.8% in early 2017 to under 10% by the end of 2018, indicating reduced overall profitability relative to total assets. Subsequently, it improved steadily, reaching above 15% in mid-2020 before settling just above 13% in early 2021. This recovery phase points to enhanced profitability and potentially more effective asset management in the latter periods.

The financial ratios under review reveal several notable patterns and trends over the analyzed periods.

Tax Burden Ratio

The tax burden ratio shows a gradual increase from 0.70 in the first quarter of 2017 to a relatively stable range near 0.78-0.79 from 2019 onwards. This indicates a consistently higher proportion of earnings retained after taxes in recent years compared to earlier periods, suggesting an effective tax rate reduction or improved tax management over time.

Interest Burden Ratio

This ratio remained relatively steady, hovering between 0.88 and 0.93 across the entire timeframe. The slight increase observed post-2019 implies a marginal improvement in earnings before interest and taxes relative to earnings before taxes, reflecting stable or slightly improved interest expense management without significant fluctuations.

EBIT Margin

There is an observable downward trend in EBIT margin from early 2017 through the end of 2018, declining from 18.85% to 11.60%. However, beginning in 2019, the EBIT margin shows a recovery trend rising back to a peak of 18.63% by mid-2020 before slightly easing to around 16.72% by early 2021. This pattern suggests the company faced margin pressure through 2018 but undertook successful operational improvements or cost controls in subsequent years.

Net Profit Margin

Similar to EBIT margin, the net profit margin also declined substantially during 2017 and 2018, from approximately 12% to a low near 7.63%, before recovering steadily from 2019 onwards. The margin peaked around 13.58% by mid-2020 and then slightly decreased to about 12.06% in early 2021. The recovery trajectory in net profit margin is indicative of an overall profitability improvement, potentially reflecting a combination of enhanced operational efficiency, favorable tax effects, and controlled interest costs.

Overall, the data reflects a period of contraction in profitability margins during 2017-2018, followed by a steady improvement across 2019 and 2020. The stabilization of tax and interest burdens supports the improved net margins, signaling effective management of both tax obligations and financing costs. The partial margin recovery demonstrates a resilience and adaptability in the company’s earnings generation capability amid changing operational conditions.