McDonald’s Corporation is a global leader in the fast-food industry, known for its iconic burgers, fries, and other quick-service offerings. The company was founded in 1940 and is headquartered in Chicago, Illinois. McDonald's operates thousands of restaurants worldwide, serving millions of customers daily with a focus on convenience, quality, and customer satisfaction.
The cash flow statement provides insight into 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 helps investors and analysts assess how a company is managing its cash resources.
The chart above illustrates the cash flow of McDonald’s Corporation in 2021. The width of the bars represents the cash flow amount, with wider bars indicating larger amounts.
We begin on the left with the company's cash position at the start of the year. The cash increased during the year, indicating that cash generated from operating activities was substantial enough to cover the cash used in financing and investing activities. The cash flow from operating activities is the primary source of cash, while the cash flow from investing activities is negative, showing more cash was spent on investments than received from asset sales.
The cash flow from financing activities is also negative, indicating 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.
To understand the scale of McDonald’s 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 intended to provide a sense of the scale of the company's cash flow and its rapid movement.
In 2021, McDonald’s Corporation generated $9,141.5 million in cash from operating activities, spent $2,165.7 million on investing activities, and used $5,595.6 million in financing activities. Consequently, the company's cash balance increased by $1,260.1 million during the year.
The company's beginning cash balance was $3.4 million, typically including cash and cash equivalents like short-term investments that can be easily converted into cash. The company's ending cash balance was $4.7 million.
The company's capital expenditures for the year were $2,040 million, representing the cash 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 $7,101.5 million in 2021. This amount represents the cash available to pay dividends, repurchase stock, or make other investments.
| Cash Flow from Operations | 9,141,500,000 |
| Cash Flow from Investing | -2,165,700,000 |
| Cash Flow from Financing | -5,595,600,000 |
| Changes in Cash | 1,380,200,000 |
| Effect of Exchange Rate Changes | -120,100,000 |
| Beginning Cash Position | 3 |
| Ending Cash Position | 5 |
| Capital Expenditures | -2,040,000,000 |
| Free Cash Flow | 7,101,500,000 |
All amounts in USD
McDonald’s Corporation demonstrated strong cash flow management in 2021, with significant cash generation from operating activities. Despite negative cash flows from investing and financing activities, the company successfully increased its cash position by the end of the year. The substantial free cash flow highlights McDonald's ability to invest in growth opportunities while returning value to shareholders through dividends and share repurchases.
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