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: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Aggregate Accruals
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General Dynamics Corp., consolidated cash flow statement
US$ in millions
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Net Earnings
- Consistently remained strong, showing a slight decline from 2965 million USD in 2015 to 2912 million USD in 2017, followed by a notable increase to 3484 million USD by 2019, indicating improved profitability in the latter years.
- Depreciation and Amortization
- Depreciation of property, plant, and equipment was relatively stable around 360 million USD from 2015 to 2017, then increased significantly to 493 million USD in 2018 before slightly decreasing to 466 million USD in 2019. Amortization of intangible and lease right-of-use assets showed a declining trend initially from 116 million USD in 2015 to 79 million USD in 2017, then surged to 363 million USD by 2019, reflecting increased intangible asset charges or new lease accounting effects.
- Equity-based Compensation
- Expenses fluctuated moderately, peaking at 140 million USD in 2018 before a slight decrease to 133 million USD in 2019. The related excess tax benefit was only recognized in 2015.
- Deferred Income Tax Provision
- There was considerable variability, increasing from 167 million USD in 2015 to 401 million USD in 2017, turning slightly negative in 2018, and modestly positive again at 92 million USD in 2019, suggesting adjustments in tax liability or asset recognition.
- Receivables and Inventories
- Accounts receivable displayed erratic behavior with negative values in 2016 and 2017, increasing sharply in 2018 before declining again in 2019. Unbilled receivables followed a downward trend with significant negative values from 2016 onward, reaching -1303 million USD in 2019. Inventories consistently showed negative values, especially declining sharply in 2018, indicating possible reductions or write-downs.
- Working Capital Changes
- Changes in accounts payable and customer advances fluctuated—payables became positive in 2016 and 2017 but returned toward zero by 2019, while customer advances improved during 2017 and 2018 before declining again in 2019. Overall increases/decreases in assets and liabilities showed significant net declines, particularly in assets in 2016, 2017, and 2019, illustrating working capital management challenges or strategic asset disposals.
- Cash Flow from Operating Activities
- Operating cash flow was strong throughout, peaking at 3879 million USD in 2017, then slightly declining but remaining above 2900 million USD in subsequent years, supporting the company’s core liquidity and operational sustainability.
- Investing Activities
- Capital expenditures showed a rising trend, from 569 million USD in 2015 to nearly 1 billion USD by 2019, indicating increased investment in plant or equipment. Business acquisitions spiked notably in 2018 with a large outflow exceeding 10 billion USD, reflecting significant acquisition activity that year. Overall investing activities resulted in major cash outflows, especially in 2018.
- Financing Activities
- Financing cash flows varied widely. Early years showed large negative outflows due predominantly to stock repurchases and dividends. A remarkable inflow occurred in 2018 driven by proceeds from fixed-rate and floating-rate notes, reversing the prior outflows. However, 2019 returned to negative cash flow indicating repayments and lower financing inflows. Repayment of commercial paper and fixed-rate notes suggest active debt management.
- Cash and Equivalents
- Cash decreased overall during the period, falling sharply in 2018 from 2983 million USD to 963 million USD and remaining low at 902 million USD by 2019, reflecting the impact of investing outflows and financing repayments despite robust operating cash generation.
- Summary of Trends and Insights
- The data reflects a company with stable earnings and strong operating cash flow capacity, investing heavily in capital assets and engaging in significant acquisition activity notably in 2018. Increased amortization and depreciation post-2017 may be associated with new assets or changes in accounting for leases. Financing patterns reveal shifting debt issuance and repayment strategies with aggressive share buybacks early in the period. Working capital shows volatility, likely connected to the company’s operational adjustments and asset management. The declining cash balance by 2019 signals substantial use of cash in investing and financing activities despite profitability and cash from operations.