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    This document provides a summary of key financial metrics and ratios for Kimberly-Clark Corporation for the years 2010 and 2009 based on reformatted financial statements. It includes metrics such as operating assets, operating liabilities, funds from operations, fixed assets, net funds from operations, net operating assets, capital expenditures and depreciation, sales, operating income, net funds from operations, cash flow before interest, cash flow, return on capital employed, return on net operating assets, net borrowing cost, financial leverage, operating liability leverage, and implicit interest on operating liabilities. The document also checks that the leverage equations work and indicates there will be sensitivity analysis on a subsequent page to see how the outputs change with different inputs.

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    penman ch 12

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    Km b Solution 12

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    This document provides a summary of key financial metrics and ratios for Kimberly-Clark Corporation for the years 2010 and 2009 based on reformatted financial statements. It includes metrics such as operating assets, operating liabilities, funds from operations, fixed assets, net funds from operations, net operating assets, capital expenditures and depreciation, sales, operating income, net funds from operations, cash flow before interest, cash flow, return on capital employed, return on net operating assets, net borrowing cost, financial leverage, operating liability leverage, and implicit interest on operating liabilities. The document also checks that the leverage equations work and indicates there will be sensitivity analysis on a subsequent page to see how the outputs change with different inputs.

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    © All Rights Reserved
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    13 views5 pages

    KM B Solution 12

    Uploaded by

    Mateo V
    This document provides a summary of key financial metrics and ratios for Kimberly-Clark Corporation for the years 2010 and 2009 based on reformatted financial statements. It includes metrics such as operating assets, operating liabilities, funds from operations, fixed assets, net funds from operations, net operating assets, capital expenditures and depreciation, sales, operating income, net funds from operations, cash flow before interest, cash flow, return on capital employed, return on net operating assets, net borrowing cost, financial leverage, operating liability leverage, and implicit interest on operating liabilities. The document also checks that the leverage equations work and indicates there will be sensitivity analysis on a subsequent page to see how the outputs change with different inputs.

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    © All Rights Reserved
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    of 5

    Kimberly-Clark Corporation (KMB)

    Solution to Continuing Case, Chapter 12


    Summary Financial Statements
    The financial statement analysis is conducted on the reformulated financial statements of
    earlier chapters, particularly the reformulated balance sheets and income statements of
    Chapter 10.
    Below are the summary numbers from those financial statements for 2010. We will carry
    out the analysis for 2010; a similar analysis apples to 2009 and earlier years. Take the
    template here and put it into a spreadsheet that will then deliver the numbers for prior
    years.
    Proceed to the next page, an click on the frame to convert it to Excel format.

    PROFITABILITY ANALYSIS: Level 1

    OA
    OL
    FO
    FA
    NFO
    NOA
    (CSE+MI)
    CSE
    NBC = NFE/Ave NFO

    2010

    2009

    18,403
    6,882
    6,511
    1,461
    5,050
    11,521
    6,471
    6,186

    17,830
    6,815
    6,454
    1,379
    5,075
    11,015
    5,940
    5,656

    Sales
    OI from sales
    Other OI
    OI
    NFE
    CI before Minority interest
    CI

    Ave.
    2010
    18,117
    6,849
    6,483
    1,420
    5,063
    11,268
    6,206
    5,921
    2.78%
    19,746
    1,903
    597
    2,500
    141
    2,359
    2,259

    KIMBERLY-CLARK CORPORATION
    Level 1 Profitability Analysis

    ROCE = CI/Ave CSE


    ROCE before MI
    RNOA = OI/Ave NOA
    Financial Leverage drivers
    NBC = NFE/Ave NFO
    Spread = RNOA - NBC
    FLEV = NFO/(CSE + MI)
    Operating liability leverage drivers
    Implicit interest on OL
    ROOA
    Short borrow rate after tax
    OLSPREAD
    OLLEV = OL/NOA

    2010
    38.15%
    38.01%
    22.19%
    2.78%
    19.41%
    0.816
    $52.05
    14.09%
    0.76%
    13.50%
    0.608%

    Check that the leverage equations work:


    ROCE before MI = RNOA + [FLEV (RNOA NBC)]
    = 22.19% + [0.816 (22.19%- 2.78%)]
    = 38.01%
    RNOA = ROOA + OLLEV [(ROOA S/T Borrowing Rate)]
    = 14.09% + [0.608 (14.09% - 0.76%)]
    = 22.19%
    (allow for rounding error)
    PROFITABILITY ANALYSIS: Level 2 and 3
    (proceed to next page)

    SENSITIVITY ANALYSIS
    Change the inputs and see how the outputs change. If you put the numbers above into a
    spreadsheet, youll do this very efficiently. The web page for Chapter 12 provides an
    engine and, of course, BYOAP has a full spreadsheet product.

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