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: Assets
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Aggregate Accruals
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Hershey Co., consolidated cash flow statement
US$ in thousands
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 Trend
- Net income including noncontrolling interest shows a consistent upward trend from 2018 to 2022, increasing from approximately $1.17 billion to $1.64 billion, indicating steady profitability growth over the period.
- Depreciation and Amortization
- Depreciation and amortization expenses gradually increased from $295 million in 2018 to $379 million in 2022, suggesting ongoing investment in long-lived assets and capital expenditures.
- Stock-Based Compensation Expense
- Stock-based compensation expense displayed a steady rise from $49 million in 2018, peaking at $66 million in 2021, before slightly decreasing to $66 million in 2022, potentially reflecting changes in equity incentives or employee compensation strategies.
- Deferred Income Taxes
- Deferred income taxes fluctuated throughout the years, with a notable dip into negative territory in 2019 (-$15 million), followed by recovery to positive values, ending at approximately $37 million in 2022, indicating variability in tax timing differences or tax planning strategies.
- Asset Impairments and Write-Downs
- There was a significant impairment of long-lived assets in 2018 ($58 million) and 2019 ($112 million), but none reported after 2020. Write-downs of equity investments increased markedly over time, rising from about $50 million in 2018 to $188 million in 2022, suggesting challenges or reevaluations of equity holdings.
- Working Capital Components
- Accounts receivable, trade, net showed volatile movements, peaking at $40 million in 2019 then declining into negative values in subsequent years, which could reflect collection patterns or revenue recognition timing. Inventories fluctuated substantially, with large negative values in 2020 and 2022, indicating possible write-downs or adjustments. Accounts payable and accrued liabilities moved from negative in 2018 to a positive $216 million in 2022, indicating increasing liabilities or delayed payments.
- Changes in Assets and Liabilities
- Net changes in assets and liabilities demonstrated erratic movements, with significant negative changes in 2018 and 2020, and a rebound in 2019 and 2021, suggesting variable working capital management or business activity effects.
- Operating Cash Flow
- Net cash provided by operating activities increased steadily from about $1.6 billion in 2018 to $2.3 billion in 2022, reflecting strong cash generation ability linked to operating performance improvements.
- Investing Activities
- Capital additions increased continuously from $329 million in 2018 to $519 million in 2022, highlighting substantial investments in property, plant, equipment, and software. Net cash used in investing activities was marked by significant outflows, especially in 2018 and 2021, where outflows exceeded $2.2 billion in 2021, primarily due to large business acquisitions and equity investments. Proceeds from sales of businesses occurred only in 2018, adding $167 million.
- Financing Activities
- Financing activities reflected considerable variability. The net cash provided in 2018 turned negative in subsequent years, reaching a large net outflow of $1.4 billion in 2022. Repayments of long-term debt were significant in 2018 and 2020, while long-term borrowings decreased after 2020. Dividends paid increased steadily from $562 million to $775 million between 2018 and 2022. Stock repurchases showed notable activity, peaking at $527 million in 2019, then decreasing. Exercise of stock options and taxes paid on employee stock awards also impacted financing cash flows variably.
- Cash and Cash Equivalents
- Cash and cash equivalents ended the period with fluctuation: rising sharply to over $1.14 billion in 2020, then declining to $329 million in 2021, and recovering to $464 million in 2022. This variability corresponds with operating cash flows, investing activities, and financing cash outflows during these years.
- Overall Financial Position Insights
- The data suggest that the company consistently increased profitability and operating cash flow, while investing heavily in capital expenditures and acquisitions, as well as managing substantial debt repayments. The shrinking in cash balances in 2021 may reflect increased investment and debt repayment activities. The combination of positive operating cash flow, rising net income, and increased capital investments indicate a growth-oriented strategy paired with disciplined financing and liquidity management.