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GuruFocus has detected 6 Warning Signs with Canon Inc $CAJ.
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Canon Inc (NYSE:CAJ)
Cash Flow from Operations
$4,573 Mil (TTM As of Dec. 2016)

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 Dec. 2016, Canon Inc's Net Income From Continuing Operations was $430 Mil. Its DDA was $554 Mil. Its Change In Working Capital was $247 Mil. Its cash flow from deferred tax was $111 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. Its Stock Based Compensation was $0 Mil. And its Cash Flow from Others was $11 Mil. In all, Canon Inc's Cash Flow from Operations for the three months ended in Dec. 2016 was $1,353 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.

Canon Inc's Cash Flow from Operations for the fiscal year that ended in Dec. 2016 is calculated as:

Cash Flow from Operations(A: Dec. 2016 )
=Net Income From Continuing Operations+DDA+Change In Working Capital+Deferred Tax
=1396.31597414+2156.03531437+661.355660136+61.9665322104
+Cash Flow from Discontinued Operations+Stock Based Compensation+Cash Flow from Others
+0+0+37.1816434924
=4,313

Canon Inc's Cash Flow from Operations for the quarter that ended in Dec. 2016 is

Cash Flow from Operations(Q: Dec. 2016 )
=Net Income From Continuing Operations+DDA+Change In Working Capital+Deferred Tax
=430.041526542+553.810795177+247.14197905+111.17423475
+Cash Flow from Discontinued Operations+Stock Based Compensation+Cash Flow from Others
+0+0+10.6122427867
=1,353

Canon Inc Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2016 was 1014.96745378 (Mar. 2016 ) + 1201.55594304 (Jun. 2016 ) + 1003.65184022 (Sep. 2016 ) + 1352.78077831 (Dec. 2016 ) = $4,573 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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.

Canon Inc's net income from continuing operations for the three months ended in Dec. 2016 was $430 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

Canon Inc's depreciation, depletion and amortization for the three months ended in Dec. 2016 was $554 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.

Canon Inc's change in working capital for the three months ended in Dec. 2016 was $247 Mil. It means Canon Inc's working capital increased by $247 Mil from Sep. 2016 to Dec. 2016 .

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

Canon Inc's cash flow from deferred tax for the three months ended in Dec. 2016 was $111 Mil.

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

Canon Inc's cash flow from discontinued operations for the three months ended in Dec. 2016 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.

Canon Inc's stock based compensation for the three months ended in Dec. 2016 was $0 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).

Canon Inc's cash flow from others for the three months ended in Dec. 2016 was $11 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 local exchange's currency.

Canon Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
NetIncomeFromContinuingOperations 4,3583,3841,5033,0323,2662,7742,3152,2231,9021,396
CF_DDA 3,0483,7363,5063,3143,3593,0812,6602,2082,2472,156
ChangeInWorkingCapital 237-2609881,810-1,286-1,506-340288-346661
CF_DeferredTax -312-35523035337489162753862
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 0000000000
Cash Flow from Others 1582455674233221451101006237
Cash Flow from Operations 7,4886,7496,7958,9326,0364,5844,9074,8943,9034,313

Canon Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
NetIncomeFromContinuingOperations 558606289573435603259532263430
CF_DDA 620615535546578591533590624554
ChangeInWorkingCapital -20920094-201155-388148131172247
CF_DeferredTax -2398-6-8-4092-12-16-27111
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 0000000000
Cash Flow from Others 2334-86103-24628587-36-2911
Cash Flow from Operations 9691,5548261,0128831,1831,0151,2021,0041,353
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