McDonald’s Corp. (NYSE:MCD)

The cash flow statement reveals a fluctuating pattern of cash generation and usage over the five-year period. While cash provided by operations generally increased, significant variations occurred in investing and financing activities, resulting in an overall decrease in cash and equivalents by the end of 2025.

Operating Activities

Cash provided by operations demonstrated an initial decline from $9,142 million in 2021 to $7,387 million in 2022, followed by a recovery to $9,612 million in 2023. This trend continued with $9,447 million in 2024 and peaked at $10,551 million in 2025. Net income contributed significantly to this cash flow, with values ranging from $6,177 million to $8,563 million. Adjustments to reconcile net income to cash from operations were consistently positive and substantial, averaging around $1,370 million annually. Changes in working capital items exhibited volatility, moving from a positive $454 million in 2021 to a negative $645 million in 2022, and then fluctuating between positive and negative values in subsequent years.

Investing Activities

Cash used for investing activities consistently represented a cash outflow. The outflow increased from $2,166 million in 2021 to $3,822 million in 2025. Capital expenditures were the primary driver of this outflow, steadily increasing from $2,040 million to $3,365 million. Purchases of restaurant businesses also contributed significantly, particularly in 2022 with an outflow of $807 million. A notable outflow of $1,837 million was recorded for purchases of equity method investments in 2024. Sales of restaurant and other businesses and sales of property provided some offsetting inflows, but were insufficient to counteract the substantial outflows.

Financing Activities

Financing activities demonstrated considerable variability. Cash used for financing activities was consistently negative, indicating net cash outflows. The largest outflow occurred in 2022 at $6,580 million, largely driven by treasury stock purchases of $3,896 million and common stock dividends of $4,168 million. Long-term financing issuances provided inflows, peaking at $5,221 million in 2023, but were consistently offset by long-term financing repayments and treasury stock purchases. Common stock dividends remained consistently high throughout the period, ranging from $4,168 million to $5,115 million. Net short-term borrowings fluctuated, providing a minor inflow in some years and a small outflow in others.

Cash and Equivalents

The company experienced an increase in cash and equivalents in 2021 and 2023, but a decrease in 2022, 2024, and 2025. The overall trend indicates a decline in cash position from $3,449 million at the beginning of 2021 to $774 million at the end of 2025. The effect of exchange rates on cash and equivalents was generally negative, although a positive effect of $85 million was observed in 2025.

In summary, while operational performance generated positive cash flow, substantial investments and financing activities, particularly treasury stock repurchases and dividend payments, resulted in a net decrease in the company’s cash and equivalents position over the analyzed period.