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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Eaton Corp. plc pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Dividend Discount Model (DDM)
- Current Ratio since 2005
- Analysis of Debt
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Eaton Corp. plc, consolidated cash flow statement
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net income and profitability trends
- Net income demonstrated a consistent upward trajectory from 2020 through 2024, increasing from $1,415 million to $3,798 million. This indicates a strong growth in profitability over the five-year period.
- Depreciation and amortization
- Depreciation and amortization expenses remained relatively stable across the years, fluctuating slightly around the $900 million mark, with a minor peak at $954 million in 2022.
- Deferred income taxes
- Deferred income taxes showed negative values throughout, with an increasing magnitude until 2023 before slightly decreasing in 2024. This pattern suggests growing deferred tax liabilities or timing differences, peaking at -$182 million in 2023.
- Pension and postretirement benefits
- Expense related to pension and other postretirement benefits declined markedly from $210 million in 2020 to $24 million in 2024, indicating reduced ongoing expense recognition. Contributions to pension plans fluctuated, with a significant increase in 2021 ($343 million), then stabilizing around $110 million afterward. Contributions to other postretirement benefit plans remained stable in the range of $18–$24 million.
- Impact of disposals and acquisitions
- Gain on sale of business was negative in the initial years, indicating losses or write-downs, but data are missing for later years. Cash paid for acquisition of businesses was notably high in 2021 ($4,500 million) but markedly reduced thereafter. Proceeds from sale of businesses peaked in 2021 at $3,129 million, then declined sharply. This suggests significant transactional activity in 2021 compared to other years.
- Working capital components and changes
- Accounts receivable, inventory, and accrued items experienced volatile movements, with negative balances in accounts receivable and inventory in most years, except starting positive in 2020. Changes in working capital were positive in 2020 but shifted to persistent negative values from 2021 onwards, indicating a net use of cash in working capital management in recent years.
- Operating cash flow performance
- Net cash provided by operating activities displayed growth over the period, from $2,944 million in 2020 to $4,327 million in 2024, reflecting strong operational cash generation correlating with increasing net income.
- Investing activities cash flow
- Capital expenditures increased steadily from $389 million in 2020 to $808 million in 2024, representing growing investment in property, plant, and equipment. Proceeds from sales of property, plant, and equipment fluctuated, peaking at $163 million in 2022. Overall, net cash used in investing activities was negative in most years except 2020, with significant outflows in 2021 and 2023, indicating heavier investment outlays and lower divestment proceeds during those years.
- Financing activities cash flow
- Proceeds from borrowings rose markedly in 2021 and 2022, then declined but remained positive. Payments on borrowings increased substantially in 2022, indicating debt repayment. Cash dividends paid showed a steady increase from $1,175 million in 2020 to $1,500 million in 2024, reflecting consistent shareholder returns. Share repurchases were irregular, with a notable large outflow of $2,492 million in 2024. Overall, net cash used in financing activities was negative in every year, with the highest outflow in 2024.
- Cash position and liquidity
- Cash at the end of the period generally increased from $438 million in 2020 to $555 million in 2024, despite fluctuations in cash flow components. The overall cash position improved slightly, supported by strong operating cash flow and managed investing and financing activities.
- Other notable observations
- Adjustments to reconcile net income to cash from operations varied widely, with a very high adjustment in 2020 ($1,529 million) and increased amounts in recent years, contributing positively to operating cash flow. Foreign currency effects on cash were minor and inconsistent, with a slight negative impact in 2024.