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).

BA 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 BAE Systems plc (BA), the free cash flow value is 2.24B.

All amounts in GBP

Operating Cash
Capital Expenditure
Free Cash Flow

BAE Systems 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).

BA Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for BAE Systems plc (LSE:BA).

31 Dec 2022 31 Dec 2021 31 Dec 2020 31 Dec 2019
Net Income 1.59B 1.76B 1.3B 1.48B
Depreciation 767M 594M 580M 515M
Change To Netincome 158M -81M -1.11B -192M
Change To Account Receivables -1.07B 610M 610M -481M
Change To Liabilities 1.49B -615M 122M 258M
Change To Inventory -93M 54M 24M -76M
Total Cash From Operating Activities 2.84B 2.45B 1.17B 1.6B
Capital Expenditures -599M -366M -385M -360M
Investments -1M -18M 17M -6M
Other Cashflows From Investing Activities 283M 80M 46M 170M
Total Cashflows From Investing Activities -422M 66M -2.04B -232M
Dividends Paid -802M -777M -746M -724M
Net Borrowings -636M -584M 1.92B -1.02B
Other Cashflows From Financing Activities -107M -527M -205M -217M
Total Cash From Financing Activities -2.33B -2.26B 973M -1.96B
Effect Of Exchange Rate 106M -7M -22M -48M
Change In Cash 190M 250M 80M -645M
Repurchase Of Stock -788M -368M -368M -368M