2021 Cash Flow Analysis for Mastercard Inc MA

Mastercard Incorporated is a global financial services corporation that facilitates electronic payments and provides related services. The company is headquartered in Purchase, New York, and was founded in 1966. Mastercard is renowned for its extensive network that enables secure and efficient transactions worldwide, as well as its innovative payment solutions and technologies.

The cash flow statement illustrates how much cash or cash equivalents a company has generated and utilized 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 to understand how a company manages its cash resources.

How to read the chart

The chart above shows the cash flow of Mastercard Incorporated 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. As the cash decreased during the year, part of that cash was used for 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 that the company spent more on new investments than it received from selling assets or investments. The cash flow from financing activities is also negative, reflecting that the company paid out more cash for purposes such as debt repayments, share buybacks, or dividend payments.

After accounting for the change in cash, 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 Mastercard Incorporated'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, Mastercard Incorporated generated $9,463 million in cash from operating activities, spent $5,272 million on investing activities, and used $6,555 million for financing activities. Consequently, the company's cash balance decreased by $2,517 million during the year.

The company's beginning cash balance was $12,419 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 $9,902 million.

The company's capital expenditures for the year were $814 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 $8,649 million in 2021. This amount represents the cash the company has available to pay dividends, repurchase stock, or make other investments.

Summary

Mastercard's cash flow in 2021 highlights a strong generation of cash from operating activities, which significantly contributes to its liquidity. Despite the negative cash flow from investing and financing activities, the company maintains a robust free cash flow, allowing it to sustain shareholder returns and strategic investments. The decrease in cash balance is primarily due to substantial outflows in investing and financing activities, reflecting Mastercard's commitment to growth and shareholder value.