2021 Cash Flow Analysis for CVS Health Corporation CVS

CVS Health Corporation is a leading healthcare company that operates in the United States. It provides a wide range of services, including pharmacy benefit management, retail and specialty pharmacy, and healthcare services. Headquartered in Woonsocket, Rhode Island, CVS Health was founded in 1963 and has grown to become a significant player in the healthcare sector, known for its extensive network of retail pharmacies and healthcare clinics.

The cash flow statement is a 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 crucial for investors and analysts as it provides insights into how a company is managing its cash resources.

How to read the chart

The chart above shows the cash flow of CVS Health Corporation in 2021. 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 increased during the year, the company effectively managed its cash flow despite the outflows in financing and investing activities. The cash flow from operating activities is the largest source of cash, while the cash flow from investing activities is negative, indicating more spending on new investments than income from asset sales. The cash flow from financing activities is also negative, reflecting that the company paid out more cash for purposes such as 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 CVS Health Corporation's 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 real cash flows as they happen, but a simulation based on the company's reported cash flow for 2021. 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 2021, CVS Health Corporation generated $18,265 million in cash from operating activities, spent $5,261 million on investing activities, and used $11,356 million in financing activities. As a result, the company's cash balance increased by $1,648 million during the year.

The company's beginning cash balance was $8,130 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 $12,691 million.

The company's capital expenditures for the year were $2,520 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 $15,745 million in 2021. This amount represents the cash the company has available to pay dividends, repurchase stock, or make other investments.

Summary

CVS Health Corporation's cash flow in 2021 highlights a strong operational cash generation capability, with $18,265 million generated from operating activities. Despite significant outflows in both investing and financing activities, the company managed to increase its cash balance by $1,648 million. The substantial free cash flow of $15,745 million indicates a robust capacity to support strategic investments and shareholder returns.