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McDonald's Corp (NYSE:MCD)
Cash Flow from Operations
$7,101 Mil (TTM As of Sep. 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 three months ended in Sep. 2014, McDonald's Corp's Net Income From Continuing Operations was $1,068 Mil. Its DDA was $413 Mil. Its Change In Working Capital was $142 Mil. Its cash flow from deferred tax was $-104 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. Its Stock Based Compensation was $23 Mil. And its Cash Flow from Others was $290 Mil. In all, McDonald's Corp's Cash Flow from Operations for the three months ended in Sep. 2014 was $1,833 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.

McDonald's Corp's Cash Flow from Operations for the fiscal year that ended in Dec. 2013 is calculated as:

McDonald's Corp's Cash Flow from Operations for the quarter that ended in Sep. 2014 is

McDonald's Corp Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2014 was 1873.5 (Dec. 2013 ) + 1907.3 (Mar. 2014 ) + 1487 (Jun. 2014 ) + 1832.9 (Sep. 2014 ) = $7,101 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.

McDonald's Corp's net income from continuing operations for the three months ended in Sep. 2014 was $1,068 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

McDonald's Corp's depreciation, depletion and amortization for the three months ended in Sep. 2014 was $413 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.

McDonald's Corp's change in working capital for the three months ended in Sep. 2014 was $142 Mil. It means McDonald's Corp's working capital increased by $142 Mil from Jun. 2014 to Sep. 2014 .

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

McDonald's Corp's cash flow from deferred tax for the three months ended in Sep. 2014 was $-104 Mil.

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

McDonald's Corp's cash flow from discontinued operations for the three months ended in Sep. 2014 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.

McDonald's Corp's stock based compensation for the three months ended in Sep. 2014 was $23 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).

McDonald's Corp's cash flow from others for the three months ended in Sep. 2014 was $290 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.

McDonald's Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
NetIncomeFromContinuingOperations 2,6023,5442,3954,3134,5514,9465,5035,4655,5860
CF_DDA 1,2501,2501,2141,2081,2161,2761,4151,4891,5850
ChangeInWorkingCapital 412-163-36246171-12940-123-1910
CF_DeferredTax -3233-39102203-76188135250
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 00142113113838693890
Cash Flow from Others 104-3231,200-64-503241-83-92270
Cash Flow from Operations 4,3374,3424,8765,9175,7516,3427,1506,9667,1210

McDonald's Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
NetIncomeFromContinuingOperations 1,4551,3961,2701,3971,5221,3971,2051,3871,0680
CF_DDA 3723863913913954094104134130
ChangeInWorkingCapital 34126-87-29210088236-3341420
CF_DeferredTax 841523-281912-24-15-1040
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 2323232323202527230
Cash Flow from Others 32-966720-8-525592900
Cash Flow from Operations 1,9991,8501,6871,5102,0511,8741,9071,4871,8330
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