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Honda Motor Co Ltd (NYSE:HMC)
Cash Flow from Investing
$-15,811 Mil (TTM As of Jun. 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 Jun. 2014, Honda Motor Co Ltd spent $3,551 Mil on purchasing property, plant, equipment. It gained $1,860 Mil from selling property, plant, and equipment. It spent $6,412 Mil on purchasing business. It gained $6,215 Mil from selling business. It spent $133 Mil on purchasing investments. It gained $117 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 $1,906 Mil for other investing activities. In all, Honda Motor Co Ltd spent $3,809 Mil on investment activities in financial market and operating subsidiaries for the three months ended in Jun. 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.

Honda Motor Co Ltd's Cash Flow from Investing for the fiscal year that ended in Mar. 2014 is calculated as:

Cash Flow from Investing(A: Mar. 2014 )
=Purchase of PPE+Sale of PPE+Purchase of Business
=-11007.8275976+6365.39850475+-27257.7446368
+Sale of Business+Purchase of Investment+Sale of Investment
+23064.6508813+-1081.87745222+795.106287454
+Net Intangibles Purchase And Sale+Cash From Discontinued Investing+Cash From Other Investing
+0+0+-7555.21286771
=-16,678

Honda Motor Co Ltd's Cash Flow from Investing for the quarter that ended in Jun. 2014 is calculated as:

Cash Flow from Investing(Q: Jun. 2014 )
=Purchase of PPE+Sale of PPE+Purchase of Business
=-3550.83546294+1860.00589739+-6412.00117948
+Sale of Business+Purchase of Investment+Sale of Investment
+6215.49046589+-132.976213879+116.905838412
+Net Intangibles Purchase And Sale+Cash From Discontinued Investing+Cash From Other Investing
+0+0+-1905.80892471
=-3,809

Honda Motor Co Ltd Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2014 was -5024.88493403 (Sep. 2013 ) + -3421.66131784 (Dec. 2013 ) + -3555.16406723 (Mar. 2014 ) + -3809.21957932 (Jun. 2014 ) = $-15,811 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.

Honda Motor Co Ltd's purchase of property, plant, equipment for the three months ended in Jun. 2014 was $-3,551 Mil. It means Honda Motor Co Ltd spent $3,551 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.

Honda Motor Co Ltd's sale of property, plant, equipment for the three months ended in Jun. 2014 was $1,860 Mil. It means Honda Motor Co Ltd gained $1,860 Mil from selling property, plant, and equipment.

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

Honda Motor Co Ltd's purchase of business for the three months ended in Jun. 2014 was $-6,412 Mil. It means Honda Motor Co Ltd spent $6,412 Mil on purchasing business.

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

Honda Motor Co Ltd's sale of business for the three months ended in Jun. 2014 was $6,215 Mil. It means Honda Motor Co Ltd gained $6,215 Mil from selling business.

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

Honda Motor Co Ltd's purchase of investment for the three months ended in Jun. 2014 was $-133 Mil. It means Honda Motor Co Ltd spent $133 Mil on purchasing investments.

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

Honda Motor Co Ltd's sale of investment for the three months ended in Jun. 2014 was $117 Mil. It means Honda Motor Co Ltd gained $117 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.

Honda Motor Co Ltd's net Intangibles purchase and sale for the three months ended in Jun. 2014 was $0 Mil. It means Honda Motor Co Ltd 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.

Honda Motor Co Ltd's cash from discontinued investing activities for the three months ended in Jun. 2014 was $0 Mil. It means Honda Motor Co Ltd 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.

Honda Motor Co Ltd's cash from other investing activities for the three months ended in Jun. 2014 was $-1,906 Mil. It means Honda Motor Co Ltd paid $1,906 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.

Honda Motor Co Ltd Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
PurchaseOfPPE -3,490-3,929-5,028-6,489-6,754-5,821-9,599-8,415-8,113-11,008
SaleOfPPE 1333411732611,2022,8855,2064,9814,8276,365
PurchaseOfBusiness 0000-23,291-12,808-23,176-21,965-19,966-27,258
SaleOfBusiness 000023,73313,79121,99021,72518,75723,065
PurchaseOfInvestment -449-2,039-1,391-1,984-548-497-2,304-628-463-1,082
SaleOfInvestment 2721,6171,8322,0766222712,919907391795
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -4,341-1,968-5,094-10,241-6,421-4,195-3,830-4,889-6,376-7,555
Cash Flow from Investing -7,875-5,978-9,507-16,377-11,457-6,375-8,793-8,284-10,943-16,678

Honda Motor Co Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
PurchaseOfPPE -2,282-2,874-2,400-1,768-2,243-2,724-3,178-2,419-2,875-3,551
SaleOfPPE 1,3581,6171,2601,0291,5651,7971,5671,3021,8041,860
PurchaseOfBusiness -5,220-6,140-6,425-5,005-5,254-7,482-8,562-5,559-6,179-6,412
SaleOfBusiness 5,4895,8165,6934,8945,0015,6126,7505,0976,0026,215
PurchaseOfInvestment -222-88-64-74-272-262-255-364-214-133
SaleOfInvestment 2141129110912817513993398117
NetIntangiblesPurchaseAndSale 0000000000
CashFromDiscontinuedInvestingActivities 0000000000
CashFromOtherInvestingActivities -1,989-1,720-1,855-1,776-1,870-2,114-1,486-1,571-2,489-1,906
Cash Flow from Investing -2,652-3,278-3,699-2,591-2,945-4,998-5,025-3,422-3,555-3,809
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