Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business. At the most fundamental level, a company’s ability to create value for shareholders is determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow (FCF).

0005 Free Cash Flow Analysis

Free cash flow, a measure commonly used by analysts to assess a company's profitability, represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

The Free Cash Flow is calculated using a number of methods including using Operating Cash Flow. Following is the formula to calculate Free Cash Flow based on Operating Cash Flow.

Free Cash Flow = Operating Cash Flow - Capital Expenditures

Using above formula to calculate Free Cash Flow for HSBC Holdings plc (0005), the free cash flow value is 7.523B.

All amounts in USD

Operating Cash
Capital Expenditure
Free Cash Flow

HSBC Holdings plc has a positive free cash flow as per the latest annual Cash flow statement released by the company. Positive free cash flow is cruscial for the financial health of a company, which can be used to pay dividends, expand operations, and deleverage its balance sheet (i.e., reduce debt).

0005 Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for HSBC Holdings plc (HKEX:0005).

31 Dec 202131 Dec 202031 Dec 201931 Dec 2018
Net Income13.92B5.23B7.38B13.73B
Change To Netincome19.56B-18.5B7.34B8.96B
Change To Liabilities
Change To Operating Activities-15.09B-47.62B-46.09B-5.7B
Total Cash From Operating Activities8.61B-44.5B-49.42B38.26B
Capital Expenditures-1.09B-1.45B-1.34B-1.2B
Total Cashflows From Investing Activities27.54B-22.43B-35.32B-16.65B
Dividends Paid-5.79B-1.33B-9B-10.05B
Net Borrowings-864M-3.54B-4.21B-4.08B
Other Cashflows From Financing Activities95.11B226.03B78.39B-6.46B
Total Cash From Financing Activities84.91B222.08B64.32B-22.53B
Effect Of Exchange Rate-15.35B19.43B1.25B-9.89B
Change In Cash105.71B174.58B-19.17B-10.81B
Repurchase Of Stock-2.09B-181M-1B-2B