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.

McDonald’s Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Net income	8,563)	8,223)	8,469)	6,177)	7,545)
Depreciation and amortization	2,199)	2,097)	1,978)	1,871)	1,868)
Deferred income taxes	(126)	(574)	(686)	(346)	(428)
Share-based compensation	165)	172)	175)	167)	139)
Net (gain) loss on sale of restaurant and other businesses	(149)	(37)	(103)	733)	(98)
Other	(207)	4)	(113)	(570)	(339)
Charges and credits	1,882)	1,662)	1,251)	1,854)	1,142)
Accounts receivable	231)	10)	(161)	(264)	310)
Inventories, prepaid expenses and other current assets	(140)	71)	17)	6)	(62)
Accounts payable	100)	(10)	50)	31)	225)
Income taxes	(239)	(292)	(220)	(547)	(303)
Other accrued liabilities	154)	(217)	206)	129)	284)
Changes in working capital items	106)	(438)	(108)	(645)	454)
Adjustments to reconcile to cash provided by operations	1,988)	1,224)	1,143)	1,209)	1,596)
Cash provided by operations	10,551)	9,447)	9,612)	7,387)	9,142)
Capital expenditures	(3,365)	(2,775)	(2,357)	(1,899)	(2,040)
Purchases of restaurant businesses	(354)	(669)	(441)	(807)	(374)
Purchases of equity method investments	—)	(1,837)	—)	—)	—)
Sales of restaurant and other businesses	346)	311)	195)	446)	196)
Sales of property	130)	122)	95)	39)	106)
Other	(579)	(498)	(676)	(457)	(54)
Cash used for investing activities	(3,822)	(5,346)	(3,185)	(2,678)	(2,166)
Net short-term borrowings	6)	326)	213)	26)	15)
Long-term financing issuances	4,724)	2,380)	5,221)	3,375)	1,154)
Long-term financing repayments	(4,802)	(2,777)	(2,441)	(2,202)	(2,240)
Treasury stock purchases	(2,056)	(2,824)	(3,054)	(3,896)	(846)
Common stock dividends	(5,115)	(4,870)	(4,533)	(4,168)	(3,919)
Proceeds from stock option exercises	285)	328)	260)	248)	286)
Other	(167)	(58)	(40)	38)	(47)
Cash used for financing activities	(7,125)	(7,495)	(4,374)	(6,580)	(5,596)
Effect of exchange rates on cash and equivalents	85)	(100)	(58)	(254)	(120)
Cash and equivalents increase (decrease)	(311)	(3,494)	1,996)	(2,125)	1,260)
Cash and equivalents at beginning of year	1,085)	4,579)	2,584)	4,709)	3,449)
Cash and equivalents at end of year	774)	1,085)	4,579)	2,584)	4,709)

Based on: 10-K (reporting date: 2025-12-31), 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).

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.

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McDonald’s Corp. (NYSE:MCD)

Cash Flow Statement