- Okay, here it is, the cash flow statement for
Walmart for the year end of January 31st, 2018.
Remember that there are three categories
in the statement of cash flows,
operating activities, right at the top,
investing activities, in the middle,
and then, at the bottom, financing activities.
So let's start with operating activities.
Walmart's cash from operating activities
is 28 billion dollars.
That means that the day-to-day operations
that Walmart engaged in during the year
generated 28 billion dollars in cash.
That's great!
When you look at the statement of cash flows,
the first number you should look at
is cash provided by operating activities.
All right, what are you going to use this positive
operating cash flow for, this 28 billion dollars?
Well, the first thing you want to do is to buy some new stuff
to enhance the productive capacity of your business,
maybe you've got to replace some buildings or some trucks.
And the total amount spent here,
net cash used in investing activities,
is nine billion dollars.
That is how much Walmart spent, in cash, buying new stuff
to enhance the productive capacity during the year.
Now, let's do a comparison.
Let's compare the amount of cash they generated
in their operating activities to the amount of cash
they've used in their investing activities.
Walmart generated 28 billion dollars from operations
and used nine billion dollars for investing activities.
If you take the difference between those two,
it's about 19 billion dollars.
This is called being a cash cow.
A cash cow is a company that generates so much cash
from their day-to-day operating activities
that they can pay for all their new big stuff,
their buildings, their land, their trucks, and everything
in cash, and still have a bunch of cash left over.
The final section in the statement of
cash flows is the financing activities.
Here, you see that Walmart received some cash from new loans
and used 13 billion dollars in cash to repay some old loans.
Walmart also paid six billion dollars
in dividends to its shareholders.
Walmart generated so much surplus cash during the year
that the company actually used eight billion dollars
of company cash to buy back shares
of stock from its own shareholders.
Now, remember that the key number in the statement
of cash flows is cash from operating activities,
28 billion dollars for Walmart.
That is the key number.
If a company is generating positive cash
from their operating activities,
the things that they do every single day,
that's a good sign.
If that number is negative, there are some problems.
It turns out, Walmart doesn't have any cash flow problems.