The Net Change in Cash of a company is the difference in its cash position from the beginning to the end of a given period. This figure illustrates whether the company's cash reserves have grown or shrunk during that time, and is a key indicator of its liquidity status.
Net Change in Cash is a comprehensive financial metric that reflects the impact of a company's operating, investing, and financing activities on its cash reserves. It forms a part of the cash flow statement, which provides a detailed record of cash inflows and outflows.
A positive Net Change in Cash indicates an increase in the company's cash balance, signifying a successful period of cash generation. Conversely, a negative value suggests a decrease in cash reserves, which could be due to higher expenses, investments, or debt repayments.
While Net Change in Cash provides a snapshot of a company's liquidity, it should not be viewed in isolation. It's essential to identify the sources and uses of cash to understand the company's financial performance and sustainability.
For Walmart, the Net Change in Cash might result from cash generated from store sales (operating activities) minus cash used in store expansions (investing activities) and debt repayments or dividends (financing activities).
Apple's Net Change in Cash could be derived from cash inflows from product and service sales and cash outflows for research and development, acquisitions, dividends, and stock buybacks.
For Chevron, the Net Change in Cash could be influenced by cash inflows from oil and gas sales and outflows related to exploration and production investments, debt repayments, and dividend distributions.