Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Microsoft Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Net income	88,136)	72,361)	72,738)	61,271)	44,281)	39,240)
Depreciation, amortization, and other	22,287)	13,861)	14,460)	11,686)	12,796)	11,682)
Stock-based compensation expense	10,734)	9,611)	7,502)	6,118)	5,289)	4,652)
Net recognized (gains) losses on investments and derivatives	305)	196)	(409)	(1,249)	(219)	(792)
Deferred income taxes	(4,738)	(6,059)	(5,702)	(150)	11)	(6,463)
Accounts receivable	(7,191)	(4,087)	(6,834)	(6,481)	(2,577)	(2,812)
Inventories	1,284)	1,242)	(1,123)	(737)	168)	597)
Other current assets	(1,648)	(1,991)	(709)	(932)	(2,330)	(1,718)
Other long-term assets	(6,817)	(2,833)	(2,805)	(3,459)	(1,037)	(1,834)
Accounts payable	3,545)	(2,721)	2,943)	2,798)	3,018)	232)
Unearned revenue	5,348)	5,535)	5,109)	4,633)	2,212)	4,462)
Income taxes	1,687)	(358)	696)	(2,309)	(3,631)	2,929)
Other current liabilities	4,867)	2,272)	2,344)	4,149)	1,346)	1,419)
Other long-term liabilities	749)	553)	825)	1,402)	1,348)	591)
Changes in operating assets and liabilities	1,824)	(2,388)	446)	(936)	(1,483)	3,866)
Adjustments to reconcile net income to net cash from operations	30,412)	15,221)	16,297)	15,469)	16,394)	12,945)
Net cash from operations	118,548)	87,582)	89,035)	76,740)	60,675)	52,185)
Proceeds from issuance (repayments) of debt, maturities of 90 days or less, net	5,250)	—)	—)	—)	—)	—)
Proceeds from issuance of debt	24,395)	—)	—)	—)	—)	—)
Cash premium on debt exchange	—)	—)	—)	(1,754)	(3,417)	—)
Repayments of debt	(29,070)	(2,750)	(9,023)	(3,750)	(5,518)	(4,000)
Common stock issued	2,002)	1,866)	1,841)	1,693)	1,343)	1,142)
Common stock repurchased	(17,254)	(22,245)	(32,696)	(27,385)	(22,968)	(19,543)
Common stock cash dividends paid	(21,771)	(19,800)	(18,135)	(16,521)	(15,137)	(13,811)
Other, net	(1,309)	(1,006)	(863)	(769)	(334)	(675)
Net cash used in financing	(37,757)	(43,935)	(58,876)	(48,486)	(46,031)	(36,887)
Additions to property and equipment	(44,477)	(28,107)	(23,886)	(20,622)	(15,441)	(13,925)
Acquisition of companies, net of cash acquired, and purchases of intangible and other assets	(69,132)	(1,670)	(22,038)	(8,909)	(2,521)	(2,388)
Purchases of investments	(17,732)	(37,651)	(26,456)	(62,924)	(77,190)	(57,697)
Maturities of investments	24,775)	33,510)	16,451)	51,792)	66,449)	20,043)
Sales of investments	10,894)	14,354)	28,443)	14,008)	17,721)	38,194)
Other, net	(1,298)	(3,116)	(2,825)	(922)	(1,241)	—)
Net cash used in investing	(96,970)	(22,680)	(30,311)	(27,577)	(12,223)	(15,773)
Effect of foreign exchange rates on cash and cash equivalents	(210)	(194)	(141)	(29)	(201)	(115)
Net change in cash and cash equivalents	(16,389)	20,773)	(293)	648)	2,220)	(590)
Cash and cash equivalents, beginning of period	34,704)	13,931)	14,224)	13,576)	11,356)	11,946)
Cash and cash equivalents, end of period	18,315)	34,704)	13,931)	14,224)	13,576)	11,356)

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

Net Income

The net income demonstrates a generally increasing trend from 2019 to 2024, rising from $39,240 million in 2019 to $88,136 million in 2024, with a slight decline in 2023 compared to 2022. This indicates an overall improvement in profitability with some minor volatility.

Depreciation, Amortization, and Other

Depreciation and amortization expenses increased moderately between 2019 and 2022, followed by a notable jump in 2024 to $22,287 million, indicating increased capital expenditures or asset base expansion in recent periods.

Stock-Based Compensation Expense

There is a steady rise in stock-based compensation expense over the entire period, growing from $4,652 million in 2019 to $10,734 million in 2024, reflecting increased employee incentives or stock-based remuneration practices.

Net Recognized Gains/Losses on Investments and Derivatives

The figures fluctuate between gains and losses without a clear trend, with occasional small positive amounts in recent years, indicative of volatile but relatively minor impacts on overall financials from investment and derivative activities.

Deferred Income Taxes

Values are negative or near zero from 2020 onwards, suggesting consistent deferred tax liabilities or adjustments contributing negatively to net income adjustments.

Working Capital Components

Accounts Receivable: Generally negative changes indicate an increase in accounts receivable balances in 2021, 2022, and 2024, which could signal loosening credit terms or increased sales on credit.
Inventories: Fluctuates significantly, with negative values in 2021 and 2022 reversing to positive in 2023 and 2024, suggesting inventory management adjustments or shifts in production/supply chain.
Other Current Assets: These have consistently decreased over the periods, implying reduced prepayments or non-cash assets classified as current.
Accounts Payable: Generally positive with irregular negative value in 2023, indicating variable dynamics in payables management possibly involving supplier terms or payment timing.
Unearned Revenue: Shows a steady increase, suggesting growing advances or prepayments from customers.

Income Taxes

Varies significantly, with negative income tax impact in 2020, 2021, and 2023, indicating tax refunds or credits, while other years show positive tax expenses reflective of taxable income.

Other Liabilities

Other current liabilities increase notably in 2024, while long-term liabilities remain relatively stable, suggesting short-term obligations are rising.

Cash Flows from Operations

Net cash from operating activities shows a consistent upward trend, reaching $118,548 million in 2024, parallel with net income growth, highlighting strong operational cash generation capacity.

Financing Activities

Debt Transactions: Debt issuance appears only in 2024 with sizable proceeds, while repayments fluctuate yearly, peaking in magnitude in 2024, indicating active debt management.
Common Stock: Issuance gradually increased over time, while stock repurchases peaked in 2022 but declined thereafter. Despite repurchases, the company continues to issue stock, possibly balancing capital structure.
Dividends: Cash dividends steadily increase, reflecting ongoing return of capital to shareholders.
Net Cash Used in Financing: Remains negative throughout, consistent with debt repayments, share repurchases, and dividend payments exceeding inflows from stock issuance until 2024, when financing outflows lessen somewhat but remain significant.

Investing Activities

Additions to Property and Equipment: Capital expenditures rise consistently, more than tripling from 2019 to 2024, indicating aggressive investment in long-term assets.
Acquisitions and Other Purchases: Highly variable, with a peak in 2024, suggesting large-scale acquisitions or intangible asset purchases in that year.
Investment Transactions: Purchases of investments fluctuate, with a marked decline in 2024 compared to prior years; maturities and sales of investments vary but generally provide liquidity to offset some investing outflows.
Net Cash Used in Investing: Shows increased negative cash flow in 2024 compared to prior years, driven primarily by higher capital expenditures and acquisition payments, signifying aggressive expansion or asset growth strategy.

Cash Position

Cash and cash equivalents end the period with volatility, peaking in 2023 before decreasing substantially in 2024, aligned with heavy investing outflows and financing activities; the net change in cash correlates with these fluctuations.

Foreign Exchange Impact

Effects from foreign exchange rates are minimal and consistently negative, implying negligible influence on cash balances during the periods.

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Microsoft Corp. (NASDAQ:MSFT)

Cash Flow Statement