McDonald’s Corporation is a global fast-food chain known for its hamburgers, fries, and other quick-service menu items. The company was founded in 1940 and is headquartered in Chicago, Illinois. McDonald’s has become a household name worldwide, with a significant presence in the fast-food industry and a vast network of franchises.
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 is crucial for investors and analysts to understand how McDonald’s is managing its cash resources.
The chart above illustrates the cash flow of McDonald’s Corporation in 2022. 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 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 taking the change in cash into account, we end on the right with the company's cash position at the end of the year.
To get a sense of the scale of McDonald’s Corporation's cash flow, we have created a real-time counter that simulates the company's cash flow for 2022. 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 2022. The counter is meant to give you a sense of the scale of the company's cash flow and how quickly it moves.
In 2022, McDonald’s Corporation generated $7,386.7 million in cash from operating activities, spent $2,678.1 million on investing activities, and spent $6,580.2 million on financing activities. As a result, the company's cash balance decreased by $2,125.4 million during the year.
The company's beginning cash balance was $4.7 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 $2,583.8 million.
The company's capital expenditures for the year were $1,899.2 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 $5,487.5 million in 2022. This amount represents the cash the company has available to pay dividends, repurchase stock, or make other investments.
| Cash Flow from Operations | 7,386,700,000 |
| Cash Flow from Investing | -2,678,100,000 |
| Cash Flow from Financing | -6,580,200,000 |
| Changes in Cash | -1,871,600,000 |
| Effect of Exchange Rate Changes | -253,800,000 |
| Beginning Cash Position | 5 |
| Ending Cash Position | 2,583,800,000 |
| Capital Expenditures | -1,899,200,000 |
| Free Cash Flow | 5,487,500,000 |
All amounts in USD
In 2022, McDonald’s Corporation experienced a decrease in its cash balance, primarily due to significant outflows in both investing and financing activities. The company maintained a strong cash flow from operating activities, which was the largest source of cash. Despite the negative cash flow from investing and financing activities, McDonald’s managed to generate a substantial free cash flow, indicating a robust ability to fund dividends, share buybacks, and other investments. The decrease in cash balance highlights the company's strategic investments and financial management throughout the fiscal year.
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