2024 Cash Flow Analysis for American Express Co AXP

American Express Co, commonly known as American Express, is a multinational financial services corporation headquartered in New York City. Founded in 1850, the company is renowned for its credit card, charge card, and traveler's cheque businesses. American Express is a leader in the financial services industry, providing a wide range of products and services to consumers and businesses worldwide.

The cash flow statement is a crucial financial document that illustrates how much cash or cash equivalents a company has generated and used over a specific period. It is divided into three sections: operating activities, investing activities, and financing activities. This statement is essential for investors and analysts to understand how a company manages its cash resources.

How to read the chart

The chart above shows the cash flow of American Express in 2024. The width of the bars represents the amount of cash flow, with wider bars indicating larger amounts.

We start on the left with the company's cash position at the beginning of the year. Because the cash decreased during the year, a part of that cash was used for investing activities, which significantly outweighed the cash generated from operating activities. The cash flow from operating activities is the primary source of cash, but it was not enough to cover the substantial cash outflow from investing activities.

The cash flow from investing activities is negative, indicating that the company spent more on new investments than it received from selling assets or investments. The cash flow from financing activities is positive, reflecting that the company raised more cash through means such as issuing debt or equity than it paid out for purposes like debt repayments or dividend payments.

After taking the change in cash into account, we end on the right with the company's cash position at the end of the year.

Real-Time Cash Flow Counter

To get a sense of the scale of American Express's cash flow, we have created a real-time counter that simulates the company's cash flow for 2024. 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 real cash flows as they happen, but a simulation based on the company's reported cash flow for 2024. The counter is meant to give you a sense of the scale of the company's cash flow and how quickly it moves.

Cash Flow Statement

In 2024, American Express generated $14,050 million in cash from operating activities, spent $24,402 million on investing activities, and raised $4,436 million from financing activities. As a result, the company's cash balance decreased by $5,956 million during the year.

The company's beginning cash balance was $46,596 million. Typically, this amount includes cash and cash equivalents, such as short-term investments that can be easily converted into cash. The company's ending cash balance was $40,640 million.

The company's capital expenditures for the year were $1,911 million. This amount represents the cash the company spent on investments in property, plant, and equipment. Subtracting capital expenditures from cash flow from operations gives the company's free cash flow, which was $12,139 million in 2024. This amount represents the cash the company has available to pay dividends, repurchase stock, or make other investments.

Summary

American Express experienced a significant cash outflow from investing activities in 2024, which was not fully offset by cash generated from operations and financing activities. Despite a decrease in cash balance, the company maintained a strong cash position at the end of the year. The positive cash flow from financing activities indicates successful efforts in raising capital, while the substantial free cash flow highlights the company's ability to generate cash after accounting for capital expenditures.