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Red Hat Inc (NYSE:RHT)
Cash Flow from Operations
$695 Mil (TTM As of Nov. 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 Nov. 2016, Red Hat Inc's Net Income From Continuing Operations was $68 Mil. Its DDA was $22 Mil. Its Change In Working Capital was $-38 Mil. Its cash flow from deferred tax was $14 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. Its Stock Based Compensation was $55 Mil. And its Cash Flow from Others was $16 Mil. In all, Red Hat Inc's Cash Flow from Operations for the three months ended in Nov. 2016 was $136 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.

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

Red Hat Inc's Cash Flow from Operations for the quarter that ended in Nov. 2016 is

Red Hat Inc Cash Flow from Operations for the trailing twelve months (TTM) ended in Nov. 2016 was 229.466 (Feb. 2016 ) + 232.297 (May. 2016 ) + 96.802 (Aug. 2016 ) + 136.359 (Nov. 2016 ) = $695 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.

Red Hat Inc's net income from continuing operations for the three months ended in Nov. 2016 was $68 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

Red Hat Inc's depreciation, depletion and amortization for the three months ended in Nov. 2016 was $22 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.

Red Hat Inc's change in working capital for the three months ended in Nov. 2016 was $-38 Mil. It means Red Hat Inc's working capital declined by $38 Mil from Aug. 2016 to Nov. 2016 .

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

Red Hat Inc's cash flow from deferred tax for the three months ended in Nov. 2016 was $14 Mil.

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

Red Hat Inc's cash flow from discontinued operations for the three months ended in Nov. 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.

Red Hat Inc's stock based compensation for the three months ended in Nov. 2016 was $55 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).

Red Hat Inc's cash flow from others for the three months ended in Nov. 2016 was $16 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.

Red Hat Inc Annual Data

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
NetIncomeFromContinuingOperations 60777987107147150178180199
CF_DDA 27334046485162747676
ChangeInWorkingCapital 8578861007994144150194250
CF_DeferredTax 12413921344661424-14
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 0364848617999114135166
Cash Flow from Others 17-62-56-47-38-254101438
Cash Flow from Operations 202203236255291392465541623716

Red Hat Inc Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
NetIncomeFromContinuingOperations 47484848514753615968
CF_DDA 20191919192019212122
ChangeInWorkingCapital 128899541413795-33-38
CF_DeferredTax 1-1202-46-18-2-514
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 37343637414346414555
Cash Flow from Others 355151218-8161016
Cash Flow from Operations 10813321721512314822923297136
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