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
- Common-Size Income Statement
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
- Aggregate Accruals
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Air Products & Chemicals Inc., consolidated cash flow statement
US$ in thousands
Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30).
- Net Income and Related Performance
- Net income exhibited significant fluctuations during the period. It decreased sharply from 1.3176 billion in 2015 to 661.5 million in 2016, followed by a strong rebound to 3.0212 billion in 2017. Afterward, it declined again to 1.5329 billion in 2018 before gradually rising to 1.8094 billion in 2019 and 1.9311 billion in 2020. Net income attributable to Air Products followed a similar pattern, indicating that majority ownership benefits mirrored overall profitability trends.
- Continuing and Discontinued Operations
- Income from continuing operations attributable to Air Products showed a general upward trend from 1.2779 billion in 2015 to 1.901 billion in 2020, exhibiting relative stability with some fluctuations in the mid-period. Conversely, discontinued operations showed volatile performance, with a large positive income in 2016 (884.2 million) followed by significant losses in 2017 (-1.866 billion) and smaller values subsequently, suggesting the impact of divestitures or business segment exits on overall results.
- Depreciation, Amortization, and Impairments
- Depreciation and amortization expenses were relatively stable from 2015 to 2017 before increasing steadily from 970.7 million in 2018 to 1.185 billion in 2020. Impairment charges appeared sporadically, with goodwill and intangible asset impairment in 2017 (162.1 million), equity method investment impairment also in 2017 (79.5 million), and write-downs of long-lived assets associated with cost reduction actions noted in 2015 and 2017, reflecting periodic asset revaluations and restructuring efforts.
- Working Capital and Related Items
- Changes in working capital components such as trade receivables, inventories, other receivables, payables, and accrued liabilities showed considerable volatility. Payables and accrued liabilities experienced a notable decrease in 2018 (-277.7 million) and remained negative in subsequent years, indicating a net reduction in liabilities or possible changes in payment cycles. Overall, working capital changes provided or used cash inconsistently, with sharp positive impact in 2015 (218.8 million) and negative impacts in later periods, particularly 2018 and 2020.
- Cash Flows from Operating Activities
- Cash provided by operating activities showed consistent growth over the years, increasing from 2.438 billion in 2015 to 3.2647 billion in 2020. This indicates improving cash generation capability from the core business despite fluctuations in net income, signaling effective management of operating assets and liabilities.
- Investing Activities
- Significant and increasing cash outflows were noted from additions to plant and equipment, expanding from 1.615 billion in 2015 to 2.509 billion in 2020, demonstrating ongoing capital investment and potential expansion projects. Acquisitions and investments displayed irregular patterns with occasional sizable expenditures and proceeds, including large purchases of investments in 2017 and 2020. Proceeds from sale of assets and investments varied without a clear trend, suggesting opportunistic asset management. Overall, cash used for investing activities grew substantially, reaching 3.56 billion in 2020, reflecting aggressive investment outlays.
- Financing Activities
- Financing cash flows were predominantly negative in most years except 2020, where a large positive inflow of 3.285 billion occurred. Long-term debt proceeds surged in 2020 to 4.896 billion after being relatively lower or absent in prior years, indicating substantial borrowing during that year. Payments on long-term debt remained somewhat stable, ranging around 400-700 million annually. Dividends steadily increased over time, rising from 677.5 million in 2015 to 1.1036 billion in 2020, reflecting consistent shareholder returns. The issuance proceeds from stock option exercises declined over the period. Overall, the company maintained a strategy of returning capital to shareholders while managing debt levels actively, with a notable shift in 2020 towards increased financing inflows.
- Cash Position and Liquidity
- The company’s cash and cash equivalents fluctuated significantly, with a large increase from 150.13 million in 2016 to 3.2736 billion in 2017, then decreasing to 2.2487 billion in 2019 before sharply increasing to 5.253 billion in 2020. The net increase in cash and cash items displayed high volatility and was influenced by large investing and financing cash flow changes, particularly in 2017 and 2020. Exchange rate effects were generally minor but occasionally negatively impacted cash balances.