Cash Flow Statement
Quarterly Data
The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.
The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.
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McKesson Corp. pages available for free this week:
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Debt
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McKesson Corp., consolidated cash flow statement (quarterly data)
US$ in millions
Based on: 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-K (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-K (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-K (reporting date: 2014-03-31), 10-Q (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-K (reporting date: 2013-03-31), 10-Q (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-K (reporting date: 2012-03-31), 10-Q (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-K (reporting date: 2011-03-31), 10-Q (reporting date: 2010-12-31), 10-Q (reporting date: 2010-09-30), 10-Q (reporting date: 2010-06-30).
The financial data over the periods exhibits notable fluctuations and discernible trends in profitability, cash flows, and operational adjustments. Net income generally shows substantial variability quarter to quarter, with peaks such as $521 million in March 2012 and lows around $64 million in December 2013. Despite fluctuations, there is an overall tendency toward higher earnings in the most recent periods compared to the earlier quarters.
Non-cash items including depreciation and amortization remain relatively consistent, typically within a range of approximately $120 million to $280 million across quarters, with a marked increase starting in 2013 through 2016. The pattern suggests increased investment in capital assets or changes in asset base.
Impairment charges are sporadic but significant when they occur, for example a goodwill impairment charge of $290 million appears in the latest period. Asset impairment related to capitalized software is present only in specific periods, indicating selective write-downs rather than systematic trends.
Deferred taxes show no clear consistent directional trend; their recorded values oscillate between positive and negative amounts, potentially reflecting varying tax liabilities or timing differences in tax expense recognition.
Operating asset and liability changes demonstrate volatile movements. Receivables and inventories alternate between positive and negative impacts on cash, with extreme variations, such as a large negative inventory adjustment of -$1,458 million in December 2014 and substantial payables fluctuations including a $2,611 million increase in March 2015. These swings illustrate significant working capital management dynamics and inventory cycles.
Charges related to the last-in-first-out (LIFO) inventory method emerge strongly from mid-2013 onward, suggesting increased LIFO accounting adjustments influencing earnings. Gains and losses from sales of businesses and business combinations are irregular but do create material one-off impacts on results, for example a $-81 million gain on business combination in March 2012 and some substantial sale-related gains/losses in later periods.
Net cash from operating activities shows a pattern of strong quarters alternated with weaker results, though the overall levels tend to be robust especially from 2013 onwards, with peaks such as $3,106 million in March 2016 and lows like -$552 million in June 2012. This inconsistency may be linked with large swings in working capital components and non-recurring items.
Investing activities predominantly use cash, reflecting ongoing expenditures on property, plant, equipment, and acquisitions. Significant investing outflows occur sporadically, notably a $4,518 million outflow for acquisitions in March 2014 and a large negative amount in the same quarter possibly related to restricted cash movement for acquisitions. Capitalized software expenditures appear steady at moderate levels throughout the quarters.
Financing activities reveal irregular cash flows, with substantial repayments and issuances of both short- and long-term debt. For example, there is a marked increment in short-term borrowings in early 2014 supporting enriched financing capacity and subsequent repayments in coming quarters. Share repurchases are notably large and relatively consistent over many quarters, with values such as around -$1 billion in various periods. Dividend payments are steady, slightly increasing over time.
Exchange rate effects on cash are generally minor but negative in several quarters, contributing occasionally to overall cash fluctuations.
Overall, the analysis shows a company managing significant operational volatility, strategic acquisitions, and capital expenditures. The fluctuating net income alongside large adjustments for impairments and working capital changes highlight sensitivity to operational cycles and investment timing. Cash flow from operations is strong though variable, underpinning ongoing investing and financing needs. Financing appears actively managed with tactical use of debt and equity transactions alongside continuous shareholder returns through dividends and repurchases.