📊 Example 4: Company C again – Cashflow & Shareholder Equity Matching Over Time
📌 Period: Last 3 Years (2022-2024)
📌 Currency: USD
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🔹 Cashflow and Shareholder Returns Align Over Time
Company C is a great example of how cashflow and shareholder payments tend to match over time. Over the last three years:
💰 Total Free Cashflow: $1.59 billion
💰 Total Dividends Paid to Shareholders: $1.3 billion
📌 Key Insight: Most of the cash Company C generated has been returned to shareholders as dividends, proving the long-term link between cashflow and shareholder returns.
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🔎 Where Did Company C’s Cash Go?
📌 1️⃣ Majority Paid as Dividends
• Over 80% of the cashflow generated was returned to shareholders.
• This follows the natural rule that companies with strong cash generation eventually pay it out.
📌 2️⃣ Some Cash Retained for Stability
• Company C didn’t pay out 100%—a portion was held as cash to strengthen the balance sheet.
• This allows the company to have liquidity for future needs or downturns.
📌 3️⃣ A Small Portion Used to Reduce Liabilities
• Instead of taking on more debt, Company C used part of its cashflow to pay down liabilities, reducing financial risk.
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📊 Key Takeaways
✔ Over time, cashflow and shareholder payments tend to match.
✔ Companies that generate cash will eventually return it to owners through dividends or buybacks.
✔ Company C followed this pattern, distributing most of its cash to shareholders while keeping some for stability.
📌 This is why tracking free cashflow is critical. If a company consistently generates cash, it will eventually return that value to shareholders.
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👉 Go to the Next Example
👉 Go to Lesson 5`
📌 Period: Last 3 Years (2022-2024)
📌 Currency: USD
⸻
🔹 Cashflow and Shareholder Returns Align Over Time
Company C is a great example of how cashflow and shareholder payments tend to match over time. Over the last three years:
💰 Total Free Cashflow: $1.59 billion
💰 Total Dividends Paid to Shareholders: $1.3 billion
📌 Key Insight: Most of the cash Company C generated has been returned to shareholders as dividends, proving the long-term link between cashflow and shareholder returns.
⸻
🔎 Where Did Company C’s Cash Go?
📌 1️⃣ Majority Paid as Dividends
• Over 80% of the cashflow generated was returned to shareholders.
• This follows the natural rule that companies with strong cash generation eventually pay it out.
📌 2️⃣ Some Cash Retained for Stability
• Company C didn’t pay out 100%—a portion was held as cash to strengthen the balance sheet.
• This allows the company to have liquidity for future needs or downturns.
📌 3️⃣ A Small Portion Used to Reduce Liabilities
• Instead of taking on more debt, Company C used part of its cashflow to pay down liabilities, reducing financial risk.
⸻
📊 Key Takeaways
✔ Over time, cashflow and shareholder payments tend to match.
✔ Companies that generate cash will eventually return it to owners through dividends or buybacks.
✔ Company C followed this pattern, distributing most of its cash to shareholders while keeping some for stability.
📌 This is why tracking free cashflow is critical. If a company consistently generates cash, it will eventually return that value to shareholders.
⸻
👉 Go to the Next Example
👉 Go to Lesson 5`