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, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Net income	1,541,300	1,108,746	1,772,262	1,132,703	1,053,849
Loss from discontinued operations	—	—	41,540	—	—
Depreciation	262,100	278,169	284,997	172,074	170,323
Non-cash lease expense	370,800	—	—	—	—
Amortization of intangible assets	312,800	318,112	206,764	25,637	28,239
Amortization of inventory purchase accounting adjustments	—	—	54,924	—	—
Loss on extinguishment of debt	14,800	—	—	—	—
Impairment of trademarks	122,100	—	2,022	10,688	—
Amortization of credit facility and debt issuance costs	9,200	12,133	8,313	63,759	3,096
Provisions for environmental-related matters	23,000	176,297	15,443	42,932	31,071
Provisions for qualified exit costs	8,800	14,923	50,503	3,038	9,761
Deferred income taxes	(131,100)	(143,378)	(606,135)	(68,241)	4,976
Defined benefit pension plans net cost	43,100	36,371	18,153	14,851	6,491
Stock-based compensation expense	101,700	82,588	90,292	72,109	72,342
Net decrease in postretirement liability	(14,400)	(15,863)	(17,865)	(12,373)	(6,645)
Decrease in non-traded investments	82,300	72,453	65,703	64,689	65,144
(Gain) loss on sale or disposition of assets	16,100	12,825	5,422	(30,564)	(803)
Other	15,800	(13,839)	1,051	5,101	3,615
(Increase) decrease in accounts receivable	(73,200)	18,424	(49,850)	(113,855)	(56,873)
(Increase) decrease in inventories	(75,500)	(119,510)	(89,959)	(52,577)	(40,733)
Increase (decrease) in accounts payable	36,200	113,786	166,687	(118,893)	160,111
Increase (decrease) in accrued taxes	5,100	2,717	(20,878)	(2,159)	4,606
Increase (decrease) in accrued compensation and taxes withheld	49,600	4,640	11,286	60,632	(13,128)
(Increase) decrease in refundable income taxes	(47,800)	20,092	(15,520)	(1,343)	19,230
Increase (decrease) in California litigation accrual	(59,600)	136,333	—	—	—
Other	18,800	(46,773)	16,270	56,215	(955)
Change in working capital accounts	(146,400)	129,709	18,036	(171,980)	72,258
Change in operating lease liabilities	(368,400)	—	—	—	—
Costs incurred for environmental-related matters	(26,100)	(17,718)	(13,792)	(15,178)	(11,995)
Costs incurred for qualified exit costs	(12,800)	(21,256)	(45,422)	(6,267)	(11,200)
Adjustments to reconcile net income to net operating cash	683,400	921,526	179,949	170,275	436,673
Other	96,600	(86,572)	(68,243)	5,594	(43,059)
Net operating cash	2,321,300	1,943,700	1,883,968	1,308,572	1,447,463
Capital expenditures	(328,900)	(250,957)	(222,767)	(239,026)	(234,340)
Acquisitions of businesses, net of cash acquired	(77,300)	—	(8,810,315)	—	—
Proceeds from sale of assets	6,900	38,354	47,246	38,434	11,300
Increase in other investments	(63,300)	(39,037)	(61,526)	(103,182)	(65,593)
Net investing cash	(462,600)	(251,640)	(9,047,362)	(303,774)	(288,633)
Net increase (decrease) in short-term borrowings	(122,800)	(300,942)	356,320	(899)	(630,226)
Proceeds from long-term debt	1,332,800	—	8,275,169	500	797,514
Payments of long-term debt	(1,875,800)	(852,627)	(1,852,812)	(1,111)	—
Payments for credit facility and debt issuance costs	(13,600)	(5,185)	(49,376)	(65,119)	—
Payments of cash dividends	(420,800)	(322,934)	(319,029)	(312,082)	(249,647)
Proceeds from stock options exercised	154,600	90,745	143,579	86,831	89,990
Income tax effect of stock-based compensation exercises and vesting	—	—	—	—	89,691
Treasury stock purchased	(778,800)	(613,312)	—	—	(1,035,291)
Proceeds from real estate financing transactions	7,200	225,345	—	—	—
Other	(129,200)	32,257	(39,761)	(15,473)	(42,384)
Net financing cash	(1,846,400)	(1,746,653)	6,514,090	(307,353)	(980,353)
Effect of exchange rate changes on cash	(6,000)	5,885	(36,276)	(13,396)	(13,465)
Net increase (decrease) in cash and cash equivalents	6,300	(48,708)	(685,580)	684,049	165,012
Cash and cash equivalents at beginning of year	155,500	204,213	889,793	205,744	40,732
Cash and cash equivalents at end of year	161,800	155,505	204,213	889,793	205,744

Based on: 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), 10-K (filing date: 2016-02-24).

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 2017 to 2018 and from 2018 to 2019.
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 increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
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 2017 to 2018 and from 2018 to 2019.

Sherwin-Williams Co. (NYSE:SHW)

Cash Flow Statement