Switch to:
Walgreen Co (NYSE:WAG)
Cash Flow from Investing
$-2,036 Mil (TTM As of May. 2014)

Cash Flow from Investing covers the cash a company gains or spends from investment activities in financial market and operating subsidiaries. It also includes the cash the company used for property, plant and equipment (PPE).

For the three months ended in May. 2014, Walgreen Co spent $230 Mil on purchasing property, plant, equipment. It gained $0 Mil from selling property, plant, and equipment. It spent $26 Mil on purchasing business. It gained $0 Mil from selling business. It spent $70 Mil on purchasing investments. It gained $8 Mil from selling investments. It paid $0 Mil for net Intangibles purchase and sale. It paid $0 Mil for discontinued investing activities. And it paid $59 Mil for other investing activities. In all, Walgreen Co spent $377 Mil on investment activities in financial market and operating subsidiaries for the three months ended in May. 2014.


Definition

Cash Flow from Investing covers the cash a company gains or spends from investment activities in financial market and operating subsidiaries. It also includes the cash the company used for property, plant and equipment (PPE).

If a company spends cash on property, plant and equipment (PPE), this will reduce their cash position. This is called Capital Expenditures (CPEX).

Likewise, if a company buys another company for cash, this will reduce their cash position.

Walgreen Co's Cash Flow from Investing for the fiscal year that ended in Aug. 2013 is calculated as:

Walgreen Co's Cash Flow from Investing for the quarter that ended in May. 2014 is calculated as:

Walgreen Co Cash Flow from Investing for the trailing twelve months (TTM) ended in May. 2014 was -491 (Aug. 2013 ) + -925 (Nov. 2013 ) + -243 (Feb. 2014 ) + -377 (May. 2014 ) = $-2,036 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Cash flow from investing contains nine items:

1. Purchase Of Property, Plant, Equipment:
Purchase of PPE indicates the amount used to purchase property, plant, and equipment.

Walgreen Co's purchase of property, plant, equipment for the three months ended in May. 2014 was $-230 Mil. It means Walgreen Co spent $230 Mil on purchasing property, plant, equipment.

In the capital spending for property, plant and equipment (PPE), some part of spending may be from the expansion of business. The business needs more property, plant and equipment (PPE) as it grows. Another part may be from replacement of the property, plant and equipment (PPE) of existing business. For some companies, the cash spent on replacing of the property, plant and equipment (PPE) of the existing business will be close to the depreciation of property, plant and equipment (PPE) reported in the income statement.

In Warren Buffett’s definition of “Owner’s Earnings”, he deducts the estimate of the cost of replacing the property, plant and equipment (PPE) of the existing business from cash flow from operations. The cash spent on the new property, plant, and equipment is not deducted. The reason is because these are not costs of the existing business. In his 1986 letter to shareholders, Warren Buffett wrote this about owner earnings:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume....Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

2. Sale Of Property, Plant, Equipment:
Sale of PPE indicates the amount gained from selling property, plant, and equipment.

Walgreen Co's sale of property, plant, equipment for the three months ended in May. 2014 was $0 Mil. It means Walgreen Co gained $0 Mil from selling property, plant, and equipment.

3. Purchase Of Business:
Purchase of business indicates the amount used to purchase business.

Walgreen Co's purchase of business for the three months ended in May. 2014 was $-26 Mil. It means Walgreen Co spent $26 Mil on purchasing business.

4. Sale Of Business:
Sale of business indicates the amount gained from selling business.

Walgreen Co's sale of business for the three months ended in May. 2014 was $0 Mil. It means Walgreen Co gained $0 Mil from selling business.

5. Purchase Of Investment:
Purchase of Investments represents cash outflow on the purchase of investments in securities.

Walgreen Co's purchase of investment for the three months ended in May. 2014 was $-70 Mil. It means Walgreen Co spent $70 Mil on purchasing investments.

6. Sale Of Investment:
Sale of Investments represents cash inflow on the sale of investments in securities.

Walgreen Co's sale of investment for the three months ended in May. 2014 was $8 Mil. It means Walgreen Co gained $8 Mil from selling investments.

7. Net Intangibles Purchase And Sale:
Net Intangibles purchase and sale means the net cash inflow received by a company that comes from the purchase and sale of intangibles. It equals the cash received from sale of intangibles minus the cash spent on purchasing intangibles.

Walgreen Co's net Intangibles purchase and sale for the three months ended in May. 2014 was $0 Mil. It means Walgreen Co paid $0 Mil for net Intangibles purchase and sale.

8. Cash From Discontinued Investing Activities:
Cash from discontinued investing activities means the cash received by a company that comes from the discontinued investing activities.

Walgreen Co's cash from discontinued investing activities for the three months ended in May. 2014 was $0 Mil. It means Walgreen Co paid $0 Mil for discontinued investing activities.

9. Cash From Other Investing Activities:
Cash from other investing activities means the cash received by a company that comes from other investing activities.

Walgreen Co's cash from other investing activities for the three months ended in May. 2014 was $-59 Mil. It means Walgreen Co paid $59 Mil for other investing activities.


Related Terms

Cash Flow from Operations, Cash Flow from Financing, Cash Flow for Capital Expenditures, Purchase of PPE, Sale of PPE, Purchase of Business, Sale of Business, Purchase of Investment, Sale of Investment, Net Intangibles Purchase And Sale, Cash From Discontinued Investing, Cash From Other Investing


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Walgreen Co Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
PurchaseOfPPE -940-1,238-1,338-1,785-2,225-1,927-1,014-1,213-1,550-1,212
SaleOfPPE 616234100517900
PurchaseOfBusiness 0000-620-405-779-630-5360
SaleOfBusiness 0000000000
PurchaseOfInvestment -11,938-10,742-12,282-6,3970-2,600-3,0000-4,025-290
SaleOfInvestment 10,69511,52012,3886,826102,1003,5000016
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 1010-475-1,0801756-32239251-510
Cash Flow from Investing -2,166-434-1,684-2,396-2,818-2,776-1,274-1,525-5,860-1,996

Walgreen Co Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
PurchaseOfPPE -304-379-448-336-245-293-338-364-227-230
SaleOfPPE 0000000000
PurchaseOfBusiness -150-217-70-471-81-360-243-54-26
SaleOfBusiness 0000000000
PurchaseOfInvestment 00-4,0250-49-6-235-309-155-70
SaleOfInvestment 0000051119158
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities 0-3233-212-371-28178-59
Cash Flow from Investing -454-599-4,310-809-363-333-491-925-243-377
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide