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GuruFocus has detected 3 Warning Signs with T. Rowe Price Group Inc $TROW.
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T. Rowe Price Group Inc (NAS:TROW)
Cash Flow from Operations
$287 Mil (TTM As of Mar. 2017)

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 Mar. 2017, T. Rowe Price Group Inc's Net Income From Continuing Operations was $400 Mil. Its DDA was $36 Mil. Its Change In Working Capital was $-222 Mil. Its cash flow from deferred tax was $0 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. Its Stock Based Compensation was $37 Mil. And its Cash Flow from Others was $-62 Mil. In all, T. Rowe Price Group Inc's Cash Flow from Operations for the three months ended in Mar. 2017 was $189 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.

T. Rowe Price Group Inc's Cash Flow from Operations for the fiscal year that ended in Dec. 2016 is calculated as:

T. Rowe Price Group Inc's Cash Flow from Operations for the quarter that ended in Mar. 2017 is

T. Rowe Price Group Inc Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2017 was -104 (Jun. 2016 ) + 299.7 (Sep. 2016 ) + -97.7 (Dec. 2016 ) + 188.5 (Mar. 2017 ) = $287 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.

T. Rowe Price Group Inc's net income from continuing operations for the three months ended in Mar. 2017 was $400 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

T. Rowe Price Group Inc's depreciation, depletion and amortization for the three months ended in Mar. 2017 was $36 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.

T. Rowe Price Group Inc's change in working capital for the three months ended in Mar. 2017 was $-222 Mil. It means T. Rowe Price Group Inc's working capital declined by $222 Mil from Dec. 2016 to Mar. 2017 .

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

T. Rowe Price Group Inc's cash flow from deferred tax for the three months ended in Mar. 2017 was $0 Mil.

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

T. Rowe Price Group Inc's cash flow from discontinued operations for the three months ended in Mar. 2017 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.

T. Rowe Price Group Inc's stock based compensation for the three months ended in Mar. 2017 was $37 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).

T. Rowe Price Group Inc's cash flow from others for the three months ended in Mar. 2017 was $-62 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.

T. Rowe Price Group Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
NetIncomeFromContinuingOperations 6714914346727738841,0481,2301,2231,254
CF_DDA 54626663728191112126133
ChangeInWorkingCapital -4712-89-848-1197-7095-1,295
CF_DeferredTax 0000000000
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 8086899099104115133149162
Cash Flow from Others 09136-8-4-47-26-60-62-84
Cash Flow from Operations 7587425367339489031,2331,3441,531171

T. Rowe Price Group Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
NetIncomeFromContinuingOperations 316310333277303313194380367400
CF_DDA 28293233323234343336
ChangeInWorkingCapital -247196-29160-232-251356222-1,622-222
CF_DeferredTax 0000000000
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 38313641423739424437
Cash Flow from Others -7-22-29-4-8-59-727-3781,081-62
Cash Flow from Operations 12854434350713773-104300-98189
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