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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- Income Statement
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Geographic Areas
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Analysis of Revenues
- Analysis of Debt
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Colgate-Palmolive Co., consolidated cash flow statement
US$ in millions
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
- Net income showed a fluctuating trend with a peak in 2020 at $2,860 million, followed by a decline over the next two years, reaching $1,967 million in 2022. This represents a significant decrease from the earlier years, indicating potential challenges in profitability in the more recent periods.
- Depreciation and Amortization
- The depreciation and amortization expense steadily increased from $511 million in 2018 to $556 million in 2021, before slightly decreasing to $545 million in 2022, reflecting consistent investment in depreciable and amortizable assets.
- Restructuring and Termination Benefits
- The item displayed considerable volatility, including negative values and positive spikes, with a notable positive value of $49 million in 2022 after years of fluctuation, possibly indicating recent restructuring costs or benefits.
- Stock-Based Compensation Expense
- Stock-based compensation expense showed a moderate increase, rising from $109 million in 2018 to $135 million in 2021 before a slight decline to $125 million in 2022, reflecting changes in employee compensation policies or equity incentives.
- Impairment Charges and Gains/Losses
- Goodwill and intangible asset impairments emerged in 2021 and increased in 2022 to $721 million, indicating asset write-downs that may impact future earnings. A gain on the sale of land (-$47 million) appeared only in 2022, potentially influencing that year's income. Losses on early extinguishment of debt were reported in 2020 and 2021, showing costs related to debt management.
- Tax Items
- Deferred income taxes shifted from positive to significant negative values over the years, with the largest negative balance of -$132 million in 2021. The charge for U.S. tax reform occurred only in 2018 at $80 million.
- Working Capital Components
- Receivables and inventories showed fluctuating and sometimes negative adjustments, with strong negative values in 2022 (-$227 million and -$333 million, respectively), possibly indicating inventory reduction and receivable collections. Accounts payable and other accruals peaked significantly in 2020 ($520 million) but dropped into negative territory by 2022 (-$115 million).
- Cash Flows from Operations
- Net cash provided by operations showed an upward trend until 2020 with a peak of $3,719 million, but then declined to $2,556 million in 2022, suggesting reduced operational cash generation in recent periods despite generally positive cash flow.
- Investing Activities
- Capital expenditures increased consistently from $436 million in 2018 to $696 million in 2022, indicating higher investment in fixed assets. Purchases of marketable securities rose sharply in 2022 to $470 million, while proceeds from their sale also increased substantially in 2022 ($322 million). Payments for acquisitions were highly variable, peaking at $1,711 million in 2019, but resumed to $809 million in 2022 after no activity in 2021. Net cash used in investing activities varied widely, with a major outflow of $2,099 million in 2019 and $1,601 million in 2022, highlighting significant investment activity.
- Financing Activities
- Financing cash flows were negative throughout the period, reflecting ongoing dividend payments ($1,591 million to $1,691 million) and sizable purchases of treasury shares (around $1,200 million to $1,476 million annually). Principal payments on debt decreased substantially from $725 million in 2018 to $406 million in 2022. Proceeds from issuance of debt were irregular, with significant inflows in 2019, 2021, and 2022, which may indicate debt refinancing or capital structure adjustments. Net cash used in financing activities declined notably in 2022 to $952 million from prior years' larger outflows.
- Liquidity and Cash Position
- Cash and cash equivalents declined from a high of $1,535 million at the start of 2018 to $775 million at the end of 2022. Net decreases were observed in most years, except for a modest increase in 2019. The effect of exchange rate changes on cash was negative each year, with the greatest impact (-$60 million) in 2022. Overall, the company experienced a gradual reduction in cash reserves over the five-year period.