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 2.081B.

All amounts in GBP

Operating Cash
2.45B
Capital Expenditure
-366M
Free Cash Flow
2.081B

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 202131 Dec 202031 Dec 201931 Dec 2018
Net Income1.76B1.3B1.48B1B
Depreciation594M580M515M277M
Change To Netincome-81M-1.11B-192M96M
Change To Account Receivables610M610M-481M-757M
Change To Liabilities-615M122M258M530M
Change To Inventory54M24M-76M-16M
Change To Operating Activities20M162M162M162M
Total Cash From Operating Activities2.45B1.17B1.6B1.2B
Capital Expenditures-366M-385M-360M-358M
Investments-18M17M-6M-3M
Other Cashflows From Investing Activities80M46M170M82M
Total Cashflows From Investing Activities66M-2.04B-232M-358M
Dividends Paid-777M-746M-724M-703M
Net Borrowings-584M1.92B-1.02B-7M
Other Cashflows From Financing Activities-527M-205M-217M-206M
Total Cash From Financing Activities-2.26B973M-1.96B-915M
Effect Of Exchange Rate-7M-22M-48M41M
Change In Cash250M80M-645M-32M
Repurchase Of Stock-368M-368M-368M-368M