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Applied Materials Inc (NAS:AMAT)
Cash Flow from Operations
$1,488 Mil (TTM As of Jan. 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 Jan. 2015, Applied Materials Inc's Net Income From Continuing Operations was $348 Mil. Its DDA was $92 Mil. Its Change In Working Capital was $-347 Mil. Its cash flow from deferred tax was $36 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. Its Stock Based Compensation was $48 Mil. And its Cash Flow from Others was $-117 Mil. In all, Applied Materials Inc's Cash Flow from Operations for the three months ended in Jan. 2015 was $60 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.

Applied Materials Inc's Cash Flow from Operations for the fiscal year that ended in Oct. 2014 is calculated as:

Applied Materials Inc's Cash Flow from Operations for the quarter that ended in Jan. 2015 is

Applied Materials Inc Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2015 was 437 (Apr. 2014 ) + 584 (Jul. 2014 ) + 407 (Oct. 2014 ) + 60 (Jan. 2015 ) = $1,488 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.

Applied Materials Inc's net income from continuing operations for the three months ended in Jan. 2015 was $348 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

Applied Materials Inc's depreciation, depletion and amortization for the three months ended in Jan. 2015 was $92 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.

Applied Materials Inc's change in working capital for the three months ended in Jan. 2015 was $-347 Mil. It means Applied Materials Inc's working capital declined by $347 Mil from Oct. 2014 to Jan. 2015 .

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

Applied Materials Inc's cash flow from deferred tax for the three months ended in Jan. 2015 was $36 Mil.

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

Applied Materials Inc's cash flow from discontinued operations for the three months ended in Jan. 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.

Applied Materials Inc's stock based compensation for the three months ended in Jan. 2015 was $48 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).

Applied Materials Inc's cash flow from others for the three months ended in Jan. 2015 was $-117 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.

Applied Materials Inc Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
NetIncomeFromContinuingOperations 1,2101,5171,710961-3059381,9261092561,072
CF_DDA 301270268320291305246422410375
ChangeInWorkingCapital -391-3270227-1912245327-462114
CF_DeferredTax 202532-5819-186122222-910
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 000179147126146182162177
Cash Flow from Others 10745019982372316-1658934862
Cash Flow from Operations 1,2471,9362,2091,7103331,7232,4291,8516231,800

Applied Materials Inc Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
NetIncomeFromContinuingOperations -51534-129168183253262301256348
CF_DDA 97106106100989494939492
ChangeInWorkingCapital 162-97-11298-3511211883-347
CF_DeferredTax 78-7832-5611900036
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 44423940414642444548
Cash Flow from Others 54592881437-4228589-117
Cash Flow from Operations 411162243641937243758440760
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