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Diageo PLC (NYSE:DEO)
Cash Flow from Operations
$3,055 Mil (TTM As of Jun. 2014)

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 Jun. 2014, Diageo PLC's Net Income From Continuing Operations was $884 Mil. Its DDA was $756 Mil. Its Change In Working Capital was $539 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 $-159 Mil. In all, Diageo PLC's Cash Flow from Operations for the six months ended in Jun. 2014 was $2,020 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. 2014 is calculated as:

Cash Flow from Operations(A: Jun. 2014 )
=Net Income From Continuing Operations+DDA+Change In Working Capital+Deferred Tax
=3863.48122867+1073.37883959+-1018.77133106+0
+Cash Flow from Discontinued Operations+Cash Flow from Others
+0+-863.481228669
=3,055

Diageo PLC's Cash Flow from Operations for the quarter that ended in Jun. 2014 is

Cash Flow from Operations(Q: Jun. 2014 )
=Net Income From Continuing Operations+DDA+Change In Working Capital+Deferred Tax
=883.959044369+755.972696246+539.249146758+0
+Cash Flow from Discontinued Operations+Cash Flow from Others
+0+-158.703071672
=2,020

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 Jun. 2014 was $3,055 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 Jun. 2014 was $884 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 Jun. 2014 was $756 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 Jun. 2014 was $539 Mil. It means Diageo PLC's working capital increased by $539 Mil from Dec. 2013 to Jun. 2014 .

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 Jun. 2014 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 Jun. 2014 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 Jun. 2014 was $-159 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

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
NetIncomeFromContinuingOperations 3,0363,6273,1683,1802,8232,6653,2583,2323,8693,863
CF_DDA 3923954284644525695696416041,073
ChangeInWorkingCapital 31-354-366-561-462511-181-825-838-1,019
CF_DeferredTax 0000000000
Cash Flow from Disc. Op. 0000000000
Cash Flow from Others -442-7248123-209-231-268217-551-863
Cash Flow from Operations 3,0172,9443,3113,1072,6043,5143,3783,2653,0853,055

Diageo PLC Semi-Annual Data

Dec09Jun10Dec10Jun11Dec11Jun12Dec12Jun13Dec13Jun14
NetIncomeFromContinuingOperations 1,7331,0241,9871,2231,5821,6432,5581,5072,876884
CF_DDA 257326227336261379259366306756
ChangeInWorkingCapital -116621-803641-1,141321-1,220320-1,504539
CF_DeferredTax 0000000000
Cash Flow from Disc. Op. 0000000000
Cash Flow from Others -99-13844-313458-243-0-601-680-159
Cash Flow from Operations 1,7751,8331,4561,8871,1602,1001,5961,5929982,020
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