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Watsco Inc (NYSE:WSO)
Cash Flow from Operations
$268 Mil (TTM As of Sep. 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 Sep. 2016, Watsco Inc's Net Income From Continuing Operations was $81 Mil. Its DDA was $5 Mil. Its Change In Working Capital was $13 Mil. Its cash flow from deferred tax was $0 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. Its Stock Based Compensation was $3 Mil. And its Cash Flow from Others was $3 Mil. In all, Watsco Inc's Cash Flow from Operations for the three months ended in Sep. 2016 was $104 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.

Watsco Inc's Cash Flow from Operations for the fiscal year that ended in Dec. 2015 is calculated as:

Watsco Inc's Cash Flow from Operations for the quarter that ended in Sep. 2016 is

Watsco Inc Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2016 was 121.625 (Dec. 2015 ) + 41.852 (Mar. 2016 ) + 0.081 (Jun. 2016 ) + 104.367 (Sep. 2016 ) = $268 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.

Watsco Inc's net income from continuing operations for the three months ended in Sep. 2016 was $81 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

Watsco Inc's depreciation, depletion and amortization for the three months ended in Sep. 2016 was $5 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.

Watsco Inc's change in working capital for the three months ended in Sep. 2016 was $13 Mil. It means Watsco Inc's working capital increased by $13 Mil from Jun. 2016 to Sep. 2016 .

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

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

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

Watsco Inc's cash flow from discontinued operations for the three months ended in Sep. 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.

Watsco Inc's stock based compensation for the three months ended in Sep. 2016 was $3 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).

Watsco Inc's cash flow from others for the three months ended in Sep. 2016 was $3 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.

Watsco Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
NetIncomeFromContinuingOperations 82676052112138158188209227
CF_DDA 6679111216181819
ChangeInWorkingCapital -2023392312-106-17-75-95-43
CF_DeferredTax -14021387905
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 0065578101113
Cash Flow from Others 170-2033112
Cash Flow from Operations 691081138815361173150145221

Watsco Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
NetIncomeFromContinuingOperations 78713531847536348181
CF_DDA 4555555555
ChangeInWorkingCapital -1752565-59-1498877-3-9213
CF_DeferredTax 0000000000
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 3343334333
Cash Flow from Others -03-54-03-0323
Cash Flow from Operations -90107103-17-57174122420104
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