Cash Flow Statement

Beginner level

The cash flow statement provides information about a company’s 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’s 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.

Sherwin-Williams Co., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016
Net income	2,030,400	1,541,300	1,108,746	1,772,262	1,132,703
Loss from discontinued operations	—	—	—	41,540	—
Depreciation	268,000	262,100	278,169	284,997	172,074
Non-cash lease expense	381,300	370,800	—	—	—
Amortization of intangible assets	313,400	312,800	318,112	206,764	25,637
Amortization of inventory purchase accounting adjustments	—	—	—	54,924	—
Loss on extinguishment of debt	21,300	14,800	—	—	—
Impairment of trademarks	2,300	122,100	—	2,022	10,688
Amortization of credit facility and debt issuance costs	7,200	9,200	12,133	8,313	63,759
Provisions for environmental-related matters	37,100	23,000	176,297	15,443	42,932
Deferred income taxes	(145,300)	(131,100)	(143,378)	(606,135)	(68,241)
Defined benefit pension plans net cost	7,600	43,100	36,371	18,153	14,851
Stock-based compensation expense	95,900	101,700	82,588	90,292	72,109
Decrease in non-traded investments	84,800	82,300	72,453	65,703	64,689
(Gain) loss on sale or disposition of assets	(9,400)	16,100	12,825	5,422	(30,564)
Other	(6,900)	10,200	(14,779)	33,689	(4,234)
(Increase) decrease in accounts receivable	10,300	(73,200)	18,424	(49,850)	(113,855)
(Increase) decrease in inventories	84,400	(75,500)	(119,510)	(89,959)	(52,577)
Increase (decrease) in accounts payable	227,200	36,200	113,786	166,687	(118,893)
Increase (decrease) in accrued taxes	99,200	5,100	2,717	(20,878)	(2,159)
Increase (decrease) in accrued compensation and taxes withheld	197,700	49,600	4,640	11,286	60,632
(Increase) decrease in refundable income taxes	40,600	(47,800)	20,092	(15,520)	(1,343)
Increase (decrease) in California litigation accrual	(12,000)	(59,600)	136,333	—	—
Other	(50,000)	18,800	(46,773)	16,270	56,215
Change in working capital accounts	597,400	(146,400)	129,709	18,036	(171,980)
Change in operating lease liabilities	(371,400)	(368,400)	—	—	—
Costs incurred for environmental-related matters	(39,000)	(26,100)	(17,718)	(13,792)	(15,178)
Adjustments to reconcile net income to net operating cash	1,244,300	696,200	942,782	225,371	176,542
Other	133,900	83,800	(107,828)	(113,665)	(673)
Net operating cash	3,408,600	2,321,300	1,943,700	1,883,968	1,308,572
Capital expenditures	(303,800)	(328,900)	(250,957)	(222,767)	(239,026)
Acquisitions of businesses, net of cash acquired	—	(77,300)	—	(8,810,315)	—
Proceeds from sale of assets	60,700	6,900	38,354	47,246	38,434
Increase in other investments	(79,300)	(63,300)	(39,037)	(61,526)	(103,182)
Net investing cash	(322,400)	(462,600)	(251,640)	(9,047,362)	(303,774)
Net increase (decrease) in short-term borrowings	(204,600)	(122,800)	(300,942)	356,320	(899)
Proceeds from long-term debt	999,000	1,332,800	—	8,275,169	500
Payments of long-term debt	(1,204,700)	(1,875,800)	(852,627)	(1,852,812)	(1,111)
Payments for credit facility and debt issuance costs	(10,000)	(13,600)	(5,185)	(49,376)	(65,119)
Payments of cash dividends	(488,000)	(420,800)	(322,934)	(319,029)	(312,082)
Proceeds from stock options exercised	182,700	154,600	90,745	143,579	86,831
Treasury stock purchased	(2,446,300)	(778,800)	(613,312)	—	—
Proceeds from treasury stock issued	182,400	—	—	—	—
Proceeds from real estate financing transactions	—	7,200	225,345	—	—
Other	(30,600)	(129,200)	32,257	(39,761)	(15,473)
Net financing cash	(3,020,100)	(1,846,400)	(1,746,653)	6,514,090	(307,353)
Effect of exchange rate changes on cash	(1,300)	(6,000)	5,885	(36,276)	(13,396)
Net increase (decrease) in cash and cash equivalents	64,800	6,300	(48,708)	(685,580)	684,049
Cash and cash equivalents at beginning of year	161,800	155,500	204,213	889,793	205,744
Cash and cash equivalents at end of year	226,600	161,800	155,505	204,213	889,793

Based on: 10-K (filing date: 2021-02-19), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-22).

Cash flow statement item	Description	The company
Net operating cash	Amount of cash inflow (outflow) from operating activities, excluding discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities.	Sherwin-Williams Co.’s net operating cash increased from 2018 to 2019 and from 2019 to 2020.
Net investing cash	Amount of cash inflow (outflow) of investing activities, excluding discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets.	Sherwin-Williams Co.’s net investing cash decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.
Net financing cash	Amount of cash inflow (outflow) of financing activities, excluding discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.	Sherwin-Williams Co.’s net financing cash decreased from 2018 to 2019 and from 2019 to 2020.

Sherwin-Williams Co. (NYSE:SHW)

Cash Flow Statement