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Arthur J Gallagher & Co (NYSE:AJG)
Cash Flow from Operations
$505 Mil (TTM As of Sep. 2015)

Cash flow from operations refers to the cash brought in through a company’'s normal business operations. It is the cash flow before any investment or financing activities. It is the cash version of net income.

For the three months ended in Sep. 2015, Arthur J Gallagher & Co's Net Income From Continuing Operations was $133 Mil. Its DDA was $82 Mil. Its Change In Working Capital was $79 Mil. Its cash flow from deferred tax was $0 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. Its Stock Based Compensation was $3 Mil. And its Cash Flow from Others was $-53 Mil. In all, Arthur J Gallagher & Co's Cash Flow from Operations for the three months ended in Sep. 2015 was $245 Mil.


Definition

Cash flow from operations refers to the cash brought in through a company’'s normal business operations. It is the cash flow before any investment or financing activities. It is the cash version of net income.

Arthur J Gallagher & Co's Cash Flow from Operations for the fiscal year that ended in Dec. 2014 is calculated as:

Arthur J Gallagher & Co's Cash Flow from Operations for the quarter that ended in Sep. 2015 is

Arthur J Gallagher & Co Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2015 was 178.4 (Dec. 2014 ) + 113.3 (Mar. 2015 ) + -31.6 (Jun. 2015 ) + 244.8 (Sep. 2015 ) = $505 Mil.

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


Explanation

Cash flow from operations contains six items:

1. Net Income From Continuing Operations:
Net Income From Continuing Operations indicates the net income that a firm brings in from ongoing business activities. These activities are expected to continue into the next reporting period. It excludes extraordinary items, income from the cumulative effects of accounting changes, non-recurring items, income from tax loss carry forward, and preferred dividends.

Arthur J Gallagher & Co's net income from continuing operations for the three months ended in Sep. 2015 was $133 Mil.

2. Depreciation, Depletion and Amortization:
Depreciation is a present expense that accounts for the past cost of an asset that is now providing benefits.
Depletion and amortization are synonyms for depreciation.
Generally:
• The term “depreciation” is used when discussing man made tangible assets
• The term “depletion” is used when discussing natural tangible assets
• The term “amortization” is used when discussing intangible assets

Arthur J Gallagher & Co's depreciation, depletion and amortization for the three months ended in Sep. 2015 was $82 Mil.

3. Change In Working Capital:
Working Capital is a measure of a company's short term liquidity or its ability to cover short term liabilities. It is defined as the difference between a company's current assets and current liabilities. Changes in Working Capital is reported in the cash flow statement since it is one of the major ways in which net income can differ from operating cash flow.

Arthur J Gallagher & Co's change in working capital for the three months ended in Sep. 2015 was $79 Mil. It means Arthur J Gallagher & Co's working capital increased by $79 Mil from Jun. 2015 to Sep. 2015 .

4. Deferred Tax:
It is the cash flow generated from deferred tax.

Arthur J Gallagher & Co's cash flow from deferred tax for the three months ended in Sep. 2015 was $0 Mil.

5. Cash Flow from Discontinued Operations:
Cash received by a company that comes from the sale of part of business.

Arthur J Gallagher & Co's cash flow from discontinued operations for the three months ended in Sep. 2015 was $0 Mil.

6. Stock Based Compensation:
It is a way corporations use stock options to reward employees. It provides executives and employees the opportunity to share in the growth of the company and, if structured properly, can align their interests with the interests of the company's shareholders and investors, without burning the company's cash on hand.

Arthur J Gallagher & Co's stock based compensation for the three months ended in Sep. 2015 was $3 Mil.

7. Cash Flow from Others:
These are cash differences caused by the change of inventory, accounts payable, accounts receivable etc. For instance, if a company pays its suppliers slower, its cash position will build up faster. If a company receives payments from its customers slower, its account receivables will rise, and its cash position will grow more slowly (or even shrink).

Arthur J Gallagher & Co's cash flow from others for the three months ended in Sep. 2015 was $-53 Mil.


Related Terms

Net Income From Continuing Operations, Depreciation, Depletion and Amortization, Change In Working Capital, Cash Flow from Discontinued Operations, Stock Based Compensation, Cash Flow from Others, Cash Flow from Investing


Historical Data

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

Arthur J Gallagher & Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
NetIncomeFromContinuingOperations 128155111133163144195269303357
CF_DDA 6165748693115140179259334
ChangeInWorkingCapital -8616-23-31-3815-10-111-3616
CF_DeferredTax -41-400000000
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 001110914881111
Cash Flow from Others 4320-13145-51029-101-66
Cash Flow from Operations 105252161212232284343373437653

Arthur J Gallagher & Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
NetIncomeFromContinuingOperations 75604910994522213913362
CF_DDA 45505360737476828294
ChangeInWorkingCapital 83-53-16-69-10014966-27479145
CF_DeferredTax 0000000000
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 2223332333
Cash Flow from Others 034-537-34-99-5318-5322
Cash Flow from Operations 205948413935178113-32245326
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