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GuruFocus has detected 5 Warning Signs with eBay Inc \$EBAY.
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eBay Inc (NAS:EBAY)
Cash Flow from Operations
\$2,826 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, eBay Inc's Net Income From Continuing Operations was \$5,948 Mil. Its DDA was \$176 Mil. Its Change In Working Capital was \$159 Mil. Its cash flow from deferred tax was \$0 Mil. Its Cash Flow from Discontinued Operations was \$0 Mil. Its Stock Based Compensation was \$110 Mil. And its Cash Flow from Others was \$-5,773 Mil. In all, eBay Inc's Cash Flow from Operations for the three months ended in Dec. 2016 was \$620 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.

eBay 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 = 7285 + 682 + 20 + -4556 + Cash Flow from Discontinued Operations + Stock Based Compensation + Cash Flow from Others + 0 + 416 + -1021 = 2,826

eBay 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 = 5948 + 176 + 159 + 0 + Cash Flow from Discontinued Operations + Stock Based Compensation + Cash Flow from Others + 0 + 110 + -5773 = 620

eBay Inc Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2016 was 641 (Mar. 2016 ) + 763 (Jun. 2016 ) + 802 (Sep. 2016 ) + 620 (Dec. 2016 ) = \$2,826 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.

eBay Inc's net income from continuing operations for the three months ended in Dec. 2016 was \$5,948 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

eBay Inc's depreciation, depletion and amortization for the three months ended in Dec. 2016 was \$176 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.

eBay Inc's change in working capital for the three months ended in Dec. 2016 was \$159 Mil. It means eBay Inc's working capital increased by \$159 Mil from Sep. 2016 to Dec. 2016 .

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

eBay Inc's cash flow from deferred tax for the three months ended in Dec. 2016 was \$0 Mil.

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

eBay 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.

eBay Inc's stock based compensation for the three months ended in Dec. 2016 was \$110 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).

eBay Inc's cash flow from others for the three months ended in Dec. 2016 was \$-5,773 Mil.

Related Terms

Historical Data

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

eBay Inc Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 NetIncomeFromContinuingOperations 348 1,779 2,389 1,801 3,229 2,609 2,067 -865 1,947 7,285 CF_DDA 602 720 811 762 940 1,200 660 682 687 682 ChangeInWorkingCapital -172 -107 221 -897 -321 -756 -109 148 -106 20 CF_DeferredTax -123 -207 -179 349 17 -35 -33 2,744 -32 -4,556 Cash Flow from Disc. Op. 0 0 0 0 0 0 0 0 0 0 Stock Based Compensation 0 353 395 381 458 488 298 344 379 416 Cash Flow from Others 1,987 343 -729 350 -1,049 332 2,112 2,624 1,158 -1,021 Cash Flow from Operations 2,641 2,882 2,908 2,746 3,274 3,838 4,995 5,677 4,033 2,826

eBay Inc Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 NetIncomeFromContinuingOperations -19 729 449 430 545 523 482 437 418 5,948 CF_DDA -97 164 160 174 182 171 167 167 172 176 ChangeInWorkingCapital 135 108 -270 -136 -71 371 -148 -11 20 159 CF_DeferredTax -64 -235 0 0 0 0 0 0 0 0 Cash Flow from Disc. Op. 0 0 0 0 0 0 0 0 0 0 Stock Based Compensation -56 93 93 115 93 78 88 113 105 110 Cash Flow from Others 1,469 782 719 573 -63 -103 52 57 87 -5,773 Cash Flow from Operations 1,368 1,641 1,151 1,156 686 1,040 641 763 802 620
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