MARKETS / GLOSSARY / CASH FROM OPERATIONS

Cash from operations

Cash from operations is the money the business itself actually brought in during the year, after paying its running costs — the top section of the cash flow statement.

Definition

How it is computed here

Formulaas reported in the cash flow statement
UnitCurrency amount
PeriodOne fiscal year, as reported
SourceExtracted from SEC filings; every value on an asset page carries the accounting tag and the filing it came from
Identifiercaixa_operacional
The inputs

What goes into the formula

Net incomeThe starting point of the statement. The cash flow statement does not measure cash directly; it begins at accounting profit and corrects it, line by line, until what is left is cash.
Non-cash charges added backDepreciation, amortisation, impairments, share-based pay — costs that reduced profit without any money leaving.
Change in working capitalCash tied up in or released from inventory, customers who have not paid yet, and suppliers not yet paid. Growing companies routinely consume cash here even while profitable.

A formula without its inputs explained is decoration. Where an input is missing from a filing, the metric is left empty here rather than completed with a zero or an estimate.

Worked example

How to calculate cash from operations, step by step

A profitable year with heavy depreciation and growing inventory.

Net income$276M
Depreciation and amortisation$350M
Increase in inventory and receivables$6M
  1. Start at net income: $276M.
  2. Add back depreciation, which cost profit but not cash: 276 + 350 = $626M.
  3. Subtract the cash locked up in working capital: 626 − 6 = $620M.

Result: $620M of cash from a $276M profit

Profit and cash differed by $344M this year, and almost all of it is depreciation on assets bought years ago.

The figures in this example are illustrative and rounded — they are not a real company. The real figures on this site are the live ones below and on every asset page, each carrying the filing it came from.

Why it matters

What cash from operations is good for

This is the figure that says whether the business funds itself. A company whose operations generate cash can invest, pay a dividend and repay debt without asking anyone's permission; a company whose operations consume cash is on someone else's timetable, however profitable it looks.

The limit

What this number does not tell you

Cash from operations is not free: the assets still have to be maintained, and that spending appears further down the statement as capital expenditure. It also flatters easily and legally for a year — stretching supplier payments across a year-end raises it without anything improving. And it says nothing about the cost of the debt-funded assets producing it.

Every metric on this site is published with its blind spot stated. A figure without its limit is half a fact.

Advertisement
AdSense · Leaderboard 728×90 · responsive
In the data

Highest reported cash from operations

From the most recent fiscal year of each company. Only companies reporting in US dollars are ranked here — a figure in yen or won is not larger, it is in another currency.

On a real company

See it in a published filing

Their sectors

These pages show the figure across up to nineteen fiscal years, with the accounting tag and the filing behind every value.

Related

Read next