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.
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- Statement of Comprehensive Income
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Price to Book Value (P/BV) since 2005
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3M Co., consolidated cash flow statement
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 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).
- Net Income and Operating Performance
- The net income, including noncontrolling interest, generally demonstrated an upward trend from 2017 through 2021 with a dip in 2019. Specifically, it increased from 4,869 million USD in 2017 to 5,929 million USD in 2021, peaking in 2021 despite a decline in 2019.
- Depreciation and amortization expenses followed a rising trend, increasing notably from 1,544 million USD in 2017 to 1,915 million USD in 2021, indicating ongoing investments in long-term assets.
- Company pension and postretirement contributions reduced substantially over time, lessening from -967 million USD in 2017 to -180 million USD in 2021, reflecting lower cash outflows for pension funding, while pension and postretirement expense fluctuated with a notable decline in 2021 to 206 million USD.
- Stock-based compensation expense decreased gradually from 324 million USD in 2017 to around 274 million USD in 2021, indicating controlled or reduced stock-based remuneration costs.
- Adjustments and Non-Operating Items
- There was a significant reduction in gains on sales of businesses over time, from -586 million USD in 2017 improving to a minor loss position by 2020, with no data in 2021, implying lower proceeds from divestitures.
- Deferred income taxes presented a negative shift in later years, moving from a positive 107 million USD in 2017 to approximately -165 million USD by 2021, indicating growing deferred tax liabilities or decreased deferred tax assets.
- The one-time loss on the deconsolidation of the Venezuelan subsidiary appeared in 2019 only, amounting to 162 million USD, which likely impacted that year’s net results.
- Working Capital Changes
- Accounts receivable and inventories showed mixed fluctuations with some positive shifts in 2019 but a return to negative changes by 2021, suggesting variability in working capital management.
- Accounts payable and accrued income taxes balances changed inconsistently, with a notable increase in accounts payable from 24 million USD in 2017 to 518 million USD in 2021, while accrued income taxes shifted from a positive 967 million USD in 2017 to a negative 244 million USD in 2021.
- Overall changes in assets and liabilities were volatile, swinging from positive contributions in some years to a significant negative movement of -751 million USD in 2021.
- Cash Flow from Operations
- Net cash provided by operating activities showed a positive and generally increasing trend from 6,240 million USD in 2017 to a peak of 8,113 million USD in 2020, followed by a slight decrease to 7,454 million USD in 2021, indicating strong operational cash flow generation despite some year-to-year volatility.
- Investing Activities
- Capital expenditures remained relatively stable, averaging around -1,500 to -1,700 million USD annually, demonstrating consistent reinvestment in PP&E.
- Proceeds from the sale of PP&E and other assets were consistently modest, ranging roughly between 49 and 262 million USD.
- Acquisitions fluctuated considerably, including a large net outflow of -4,984 million USD in 2019, suggesting significant investment activity in that year but limited or no acquisition outflows in some other years.
- Investments in marketable securities showed steady outflows averaging around -1,500 to -2,200 million USD annually, while proceeds from their maturities and sales grew from 1,354 million USD in 2017 to 2,406 million USD in 2021, highlighting an active portfolio management strategy.
- Net cash used in investing activities showed a large negative outflow of -6,444 million USD in 2019 mainly due to acquisitions, with smaller negative amounts or a slight positive inflow in other years.
- Financing Activities
- Net change in short-term debt fluctuated near zero in later years, reflecting little reliance on short-term borrowing.
- Repayment of long-term debt varied, peaking in 2020 at -3,482 million USD, then dropping to -1,144 million USD in 2021, while proceeds from long-term debt issuance were highest in 2019 at 6,281 million USD but sharply decreased afterward.
- Purchases of treasury stock declined significantly after 2018 but increased again in 2021, implying ongoing capital return strategies.
- Dividends paid consistently increased year-over-year from -2,803 million USD in 2017 to -3,420 million USD in 2021, reflecting steady shareholder returns.
- Net cash used in financing activities was highly negative in 2018 and 2020, indicating significant cash outflows for debt repayments, share repurchases, and dividends during those years.
- Liquidity and Cash Position
- Cash and cash equivalents fluctuated, decreasing from 3,053 million USD at the end of 2017 to 2,353 million USD at the end of 2019, then increasing sharply to 4,634 million USD at the end of 2020 before a slight decline to 4,564 million USD in 2021.
- The net increase in cash showed volatility with a large positive movement of 2,281 million USD in 2020 contrasted with minor decreases or negative changes in other years.
- Overall Insights
- The data reveal a company that maintained strong and growing operational cash flows despite fluctuations in net income, actively managing its investment portfolio and capital expenditures.
- Financial strategy appears cautiously balanced between debt management, shareholder returns through dividends and share repurchases, and selective acquisition activity.
- Working capital exhibited variability but did not substantially detract from cash flow generation.
- The impact of one-time items such as the Venezuelan subsidiary deconsolidation and significant acquisition spending in 2019 account for some of the year-to-year volatility in cash flows and earnings adjustments.