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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- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Current Ratio since 2005
- Analysis of Revenues
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Based on: 10-K (reporting date: 2022-12-31), 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).
- Net Income (Loss)
- The net income fluctuated significantly over the period, peaking at $4700 million in 2019, declining sharply to a loss of $82 million in 2020, and then recovering partially in the following years to $1041 million in 2021 and $698 million in 2022. This volatility suggests impact from extraordinary items or operational challenges during 2020.
- Depreciation and Amortization
- Depreciation and amortization exhibited a steady increase from $894 million in 2018 to $1136 million in 2022, indicating continual investment in fixed and intangible assets over time.
- Stock-Based Compensation Expense
- This expense rose consistently from $140 million in 2018 to $220 million in 2022, reflecting perhaps increased employee compensation or more equity incentives granted.
- Goodwill and Intangible Asset Impairment Charges
- Impairment charges were notably high in 2020 at $533 million, before decreasing to $132 million in 2022. The spike in 2020 indicates significant write-downs of intangible assets, possibly related to business adjustments or underperformance.
- Cash Provided by Operating Activities
- Operating cash flow improved strongly from $310 million in 2018 to a peak of $1870 million in 2021, before dipping to $1526 million in 2022 but remaining robust overall. This trend indicates improving operational efficiency and cash generation capabilities despite net income volatility.
- Investing Activities
- Cash used in investing activities showed significant fluctuations, with major expenditures in acquisitions in 2019 ($4382 million) and 2021 ($2259 million). Capital expenditures steadily increased from $316 million in 2018 to $588 million in 2022, signifying ongoing investment in property, plant, equipment, and software.
- Financing Activities
- Cash flow from financing activities was positive in the early years (2018-2019), peaking at $2973 million in 2019, but shifted negative from 2021 onwards, reaching -$548 million in 2022. This reflects a transition from raising capital to repaying debt or repurchasing stock.
- Debt Activity
- Long-term borrowings increased significantly in 2019 ($7229 million), likely linked to the large acquisitions noted. Subsequent years saw repayments or extinguishments, especially notable in 2022 with $3184 million in repayment and new borrowings of $3270 million, indicating active debt management.
- Working Capital Components
- Variations in working capital accounts such as trade accounts receivable, inventories, and accounts payable were irregular, with negative changes in receivables and inventories in 2021 and 2022 suggesting tighter management or lower inventory levels. The increase in accounts payable and accrued expenses in 2021 points to deferred payments but reversed in 2022.
- Cash Position
- The cash and equivalents balance experienced a substantial increase in 2020, rising to $1995 million, peaking at $2168 million in 2021, but then decreased notably to $1126 million in 2022. The year-over-year reduction in cash in 2022 indicates higher cash utilization, potentially linked to investing and financing activities.
- Other Observations
- Deferred and prepaid income taxes fluctuated, notably with a large negative amount in 2019, indicating an adjustment or benefit. Contingent consideration expenses varied, with a significant benefit in 2021 followed by a net expense in 2022, suggesting fluctuations in acquisition-related liabilities. The gain/loss on disposal of businesses affected 2021 and 2022 cash flows, with a large gain in 2021 contributing to cash inflows.