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).

BATS 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 British American Tobacco p.l.c. (BATS), the free cash flow value is 9.19B.

All amounts in GBP

Operating Cash
Capital Expenditure
Free Cash Flow

British American Tobacco p.l.c. 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).

BATS Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for British American Tobacco p.l.c. (LSE:BATS).

31 Dec 2021 31 Dec 2020 31 Dec 2019 31 Dec 2018
Net Income 6.8B 6.4B 5.7B 6.03B
Depreciation 938M 985M 994M 800M
Change To Netincome 2.04B 2.29B 1.98B 1.87B
Change To Account Receivables -393M 300M -699M 502M
Change To Liabilities 183M -320M 730M 123M
Change To Inventory 433M -144M -371M -192M
Change To Operating Activities -285M 273M 654M 1.16B
Total Cash From Operating Activities 9.72B 9.79B 9B 10.29B
Capital Expenditures -527M -511M -664M -758M
Investments -361M -120M 62M -185M
Other Cashflows From Investing Activities 33M 48M 80M 52M
Total Cashflows From Investing Activities -1.14B -783M -639M -1.02B
Dividends Paid -4.91B -4.75B -4.6B -3.34B
Net Borrowings -4.02B -971M -1.55B -3.48B
Other Cashflows From Financing Activities -1.42B -2.16B -2.33B -1.66B
Total Cash From Financing Activities -8.75B -7.9B -8.59B -9.63B
Effect Of Exchange Rate -253M -253M -57M -138M
Change In Cash -425M 853M -293M -494M
Repurchase Of Stock -82M -18M -117M -139M
Issuance Of Stock 1.68B 1.68B 1.68B 1.68B