2021 Cash Flow Analysis for Advanced Micro Devices Inc AMD

Advanced Micro Devices, Inc. (AMD) is a multinational semiconductor company that develops computer processors and related technologies for business and consumer markets. The company is headquartered in Santa Clara, California, and was founded in 1969. AMD is renowned for its high-performance computing products, including CPUs and GPUs, which are widely used in gaming, data centers, and professional visualization.

The cash flow statement is a financial report that provides aggregate data regarding all cash inflows and outflows a company receives. It is categorized into three sections: operating activities, investing activities, and financing activities. This statement is crucial for investors and analysts to evaluate how well a company is managing its cash resources.

How to read the chart

The chart above illustrates the cash flow of Advanced Micro Devices in 2021. The width of the bars signifies the magnitude of cash flow, with wider bars indicating larger amounts.

We begin on the left with the company's cash position at the start of the year. As the cash increased during the year, it indicates that the company generated more cash than it used in its activities. The cash flow from operating activities is the largest source of cash, while the cash flow from investing activities shows a negative value, indicating more cash was spent on investments than received from asset sales. The cash flow from financing activities is also negative, suggesting that the company paid out more cash for purposes such as debt repayments or other financial obligations.

After accounting for the change in cash, we conclude on the right with the company's cash position at the end of the year.

Real-Time Cash Flow Counter

To appreciate the scale of Advanced Micro Devices' cash flow, we have created a real-time counter that simulates the company's cash flow for 2021. The counter starts when you scroll to this section and runs at the same speed as the company's reported cash flow.

This is not a live counter of actual cash flows as they occur, but a simulation based on the company's reported cash flow for 2021. The counter is intended to provide a sense of the magnitude of the company's cash flow and its rapid movement.

Cash Flow Statement

In 2021, Advanced Micro Devices generated $3,521 million in cash from operating activities, spent $686 million on investing activities, and used $1,895 million in financing activities. Consequently, the company's cash balance increased by $940 million during the year.

The company's beginning cash balance was $1,595 million, which typically includes cash and cash equivalents, such as short-term investments that can be easily converted into cash. The company's ending cash balance was $2,535 million.

The company's capital expenditures for the year were $301 million. This amount represents the cash the company spent on investments in property, plant, and equipment. Subtracting capital expenditures from cash flow from operations yields the company's free cash flow, which was $3,220 million in 2021. This amount represents the cash the company has available to pay dividends, repurchase stock, or make other investments.

Summary

In 2021, Advanced Micro Devices demonstrated strong cash flow management, with significant cash generation from operating activities. Despite the negative cash flow from investing activities, which reflects the company's investments in growth and expansion, AMD was able to increase its cash reserves. The negative cash flow from financing activities indicates a focus on reducing financial liabilities or returning value to shareholders. Overall, AMD's financial position at the end of the year was robust, with a substantial increase in cash reserves, providing a solid foundation for future investments and strategic initiatives.