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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Stryker Corp., consolidated cash flow statement
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Net Earnings
- Net earnings demonstrate considerable fluctuations over the period. After a low point in 2017 at $1,020 million, earnings surged to $3,553 million in 2018 before declining in subsequent years. There was a notable decrease to $2,083 million in 2019 and further downward movement to $1,599 million in 2020, with a moderate recovery to $1,994 million in 2021.
- Depreciation and Amortization
- Both depreciation and amortization expenses show a steady upward trend. Depreciation increased from $271 million in 2017 to $371 million in 2021, while amortization of intangible assets rose from $371 million to $619 million over the same timeframe, indicating growing non-cash expenses related to asset utilization and intangible assets.
- Asset Impairments
- Asset impairments were negligible in the early years but increased significantly in 2020 and 2021, reaching $215 million and $264 million respectively. This suggests recognition of reduced asset values impacting profitability in these years.
- Share-based Compensation and Recall Charges
- Share-based compensation consistently increased from $113 million to $171 million, reflecting ongoing employee incentive costs. Recall charges fluctuated without a clear trend, with a peak in 2019 at $192 million and a substantial increase again in 2021 to $103 million after a low in 2020.
- Income Tax and Deferred Tax Expense
- Income taxes showed significant volatility, with a positive tax expense in 2017 ($704 million) shifting to negative values in subsequent years, indicating tax benefits or credits. Deferred income tax showed a large negative value in 2018 (-$1,582 million), followed by positive values in other years, reflecting tax timing differences and possibly changes in tax strategy or rates.
- Working Capital Items
- Changes in accounts receivable, inventories, and accounts payable were variable. Accounts receivable displayed inconsistent movements, including large negative changes in 2017 and 2019 but a positive change in 2020. Inventories were negative or marginally positive, indicating inventory reductions or build-ups not consistently aligned. Accounts payable increased steadily, suggesting extended payment terms or vendor financing.
- Recall-related Payments
- Recall-related payments were markedly negative across all years, indicating cash outflows related to product recalls, with a high outflow in 2017 at -$526 million that decreased but remained significant through 2021.
- Operating Cash Flow
- Net cash provided by operating activities showed general growth from $1,559 million in 2017 to a peak of $3,277 million in 2020, with a minor reduction in 2021 to $3,263 million, indicating strong operational cash generation despite earnings volatility.
- Investing Activities
- Cash used in investing activities fluctuated significantly with a large outflow in 2020 at -$4,701 million due primarily to acquisitions (-$4,222 million). The earlier and later years show lower outflows, reflecting less aggressive acquisition activity except in 2018 with substantial acquisitions as well.
- Financing Activities
- Financing activities varied, with a positive inflow in 2018 ($1,329 million) driven by long-term debt issuance, shifting to negligible net cash flows in 2019 and 2020, before a substantial outflow in 2021 (-$2,365 million). This decline was attributable to reductions in debt repayment and increased dividend payments totaling $950 million in 2021, alongside changes in stock repurchase activities.
- Cash and Cash Equivalents
- Cash reserves showed volatility, with decreases in 2017 and 2020, including a steep drop from $4,337 million to $2,943 million in 2020, aligning with the large cash outflow in investing activities that year. The balance stabilized at around $2,944 million in 2021, signaling maintenance of liquidity despite aggressive investment and financing outflows.