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Diageo PLC (NYSE:DEO)
Cash Flow from Operations
$3,108 Mil (TTM As of Dec. 2013)

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 six months ended in Dec. 2013, Diageo PLC's Net Income From Continuing Operations was $2,876 Mil. Its DDA was $306 Mil. Its Change In Working Capital was $-1,504 Mil. Its cash flow from deferred tax was $0 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. And its Cash Flow from Others was $-680 Mil. In all, Diageo PLC's Cash Flow from Operations for the six months ended in Dec. 2013 was $998 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.

Diageo PLC's Cash Flow from Operations for the fiscal year that ended in Jun. 2013 is calculated as:

Cash Flow from Operations(A: Jun. 2013 )
=Net Income From Continuing Operations+DDA+Change In Working Capital+Deferred Tax
=3936.26707132+611.53262519+-839.150227618+0
+Cash Flow from Discontinued Operations+Cash Flow from Others
+0+-600.91047041
=3,108

Diageo PLC's Cash Flow from Operations for the quarter that ended in Dec. 2013 is

Cash Flow from Operations(Q: Dec. 2013 )
=Net Income From Continuing Operations+DDA+Change In Working Capital+Deferred Tax
=2876.44151565+306.425041186+-1504.11861614+0
+Cash Flow from Discontinued Operations+Cash Flow from Others
+0+-680.39538715
=998

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Diageo PLC Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2013 was $3,108 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.

Diageo PLC's net income from continuing operations for the six months ended in Dec. 2013 was $2,876 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

Diageo PLC's depreciation, depletion and amortization for the six months ended in Dec. 2013 was $306 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.

Diageo PLC's change in working capital for the six months ended in Dec. 2013 was $-1,504 Mil. It means Diageo PLC's working capital declined by $1,504 Mil from Jun. 2013 to Dec. 2013 .

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

Diageo PLC's cash flow from deferred tax for the six months ended in Dec. 2013 was $0 Mil.

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

Diageo PLC's cash flow from discontinued operations for the six months ended in Dec. 2013 was $0 Mil.

6. 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).

Diageo PLC's cash flow from others for the six months ended in Dec. 2013 was $-680 Mil.


Related Terms

Net Income From Continuing Operations, Depreciation, Depletion and Amortization, Change In Working Capital, Cash Flow from Discontinued Operations, 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.

Diageo PLC Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
NetIncomeFromContinuingOperations 3,4482,4463,6273,1683,1752,7922,6653,2583,2503,936
CF_DDA 413421395428463491569569641612
ChangeInWorkingCapital 152155-354-366-561-414511-178-825-839
CF_DeferredTax 0000000000
Cash Flow from Disc. Op. 0000000000
Cash Flow from Others -792-6-7248124-219-231-123200-601
Cash Flow from Operations 3,2213,0172,9443,3113,1012,6503,5143,5273,2653,108

Diageo PLC Semi-Annual Data

Jun09Dec09Jun10Dec10Jun11Dec11Jun12Dec12Jun13Dec13
NetIncomeFromContinuingOperations 8351,7331,0241,98701,5821,6602,5191,5432,876
CF_DDA 255257326227336261379256369306
ChangeInWorkingCapital 962-116621-803645-1,127307-1,195296-1,504
CF_DeferredTax 0000000000
Cash Flow from Disc. Op. 0000000000
Cash Flow from Others -350-99-138441,055517-32010-610-680
Cash Flow from Operations 1,7021,7751,8331,4562,0361,2332,0271,5891,598998
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