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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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Aggregate Accruals
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Parker-Hannifin Corp., consolidated cash flow statement
US$ in thousands
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
- Net Income Trend
- Net income showed overall growth from 2017 to 2021, peaking at approximately $1.75 billion in 2021 before declining to around $1.32 billion in 2022. This indicates strong profitability improvements over most years with a setback in the latest period.
- Depreciation and Amortization
- Depreciation expenses gradually increased from about $203 million in 2017 to over $257 million in 2022, with a notable peak in 2020. Amortization followed a rising trend as well, rising sharply in 2018 and continuing at high levels through 2022, reaching over $314 million. These trends reflect growing capital investments and intangible asset amortization.
- Stock Incentive Compensation
- Compensation costs related to stock incentive plans increased steadily over six years, nearly doubling from about $80 million in 2017 to $137 million in 2022, suggesting an increased focus on incentivizing employees via stock compensation.
- Income Tax and Currency Items
- The deferred income taxes fluctuated significantly, with losses recorded in some years, especially a large negative tax impact in 2022. Foreign currency transaction losses were minor and relatively stable until 2019, then increased sharply in losses by 2022, reflecting currency volatility impacts.
- Gains and Losses on Asset Sales and Investments
- Gains and losses on property, businesses, and investments varied with some years showing significant gains (e.g., sale of property in 2021) and others indicating losses or minor impacts. Sale of businesses was infrequent with some gains in earlier years and minor gains or losses recently. Marketable securities impacts were uneven but generally small.
- Changes in Working Capital
- Changes in accounts receivable and inventories showed high volatility, with large decreases and increases from year to year indicating fluctuations in operational demands or credit terms. Payables and accrued liabilities showed substantial swings, notably a large increase in accounts payable in 2021 and a significant jump in other accrued liabilities in 2022, suggesting varying supplier payment or accrual strategies.
- Operating Cash Flow
- Net cash provided by operating activities consistently increased from approximately $1.3 billion in 2017 to over $2.5 billion in 2021, before a slight decrease to about $2.44 billion in 2022, indicating improving operational cash generation capacity overall.
- Investing Activities
- There was a significant outflow due to acquisitions especially in 2017 and 2020, with a large negative cash impact over those years. Capital expenditures remained fairly steady around $200 million annually. Proceeds from sales of assets had spikes in 2018 and especially 2021. Marketable securities purchases and sales showed an active investment strategy with net outflows in most years except for 2018.
- Financing Activities
- Financing cash flows fluctuated significantly. There were substantial debt borrowings in some years (2017, 2019, 2022) balanced against major repayments, with the largest net cash outflow in financing activities in 2018 and again in 2021. Payments for common shares increased markedly in 2019 and 2022, coupled with steady increases in dividends paid each year.
- Cash and Cash Equivalents
- Cash balances displayed notable volatility with a sharp increase in 2019 followed by a steep drop in 2020. Subsequent years saw fluctuating cash positions ending with a significant rise in 2022 to nearly $6.65 billion, reflecting a strong liquidity position despite operational and financing cash flow variability.
- Overall Financial Condition Insights
- The data reveals a company experiencing growth in profitability and operating cash flow over most of the period but facing challenges in tax expense volatility and currency losses. Capital investments and acquisitions have been significant, affecting investing cash flows. Financing activities reflect active debt and equity management, balancing share repurchases and dividends with borrowings and repayments. Cash reserves grew substantially by 2022, suggesting a strengthening liquidity buffer amid a dynamic capital structure.