Locate the 2015 Annual Report for Kimberly-Clark and review the notes related to

Question

Locate the 2015 Annual Report for Kimberly-Clark and review the notes related to the firm’s financials. Locate one or more notes in the report that addresses how the firm handled/addressed issues related to one of the following: Inflation, Interest Rate Risk, or the firm’s Growth Rate. Be sure and reference the main paragraph or page number from the report that you are addressing in your comment.

Reference:

Block, S.B., Hirt, G.A., & Danielsen, B.R. (2017). Foundations of Financial Management. 16th ed., McGraw-Hill Education, Print.

Explanation / Answer

Kimberly-Clark’s handling of various issues is discussed below:

Inflation: The company was affected by inflation as its input costs rose in 2015. Kimberly Clark addressed the issue by increasing the net selling price marginally to pass a portion of the increased costs to its customers and clients.

Interest rate risk: Kimberly Clark managed its interest rate risk by maintaining a portfolio of variable and fixed rate debt. This is composed of both short term as well as long term instruments. For the year ended December 31, 2015 the company had a debt portfolio of 29% variable rate debt and 71% fixed rate debt.

Reference:

(i) For inflation – pages 18 and 19 of 2015 annual report

(ii) For interest rate risk – page number 29 of 2015 annual report

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