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).

## CPG 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 Compass Group PLC (CPG), the free cash flow value is 1.314B.

All amounts in GBP

Operating Cash
1.6B
Capital Expenditure
-282M
Free Cash Flow
1.314B

Compass Group 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).

## CPG Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Compass Group PLC (LSE:CPG).

30 Sep 2022 30 Sep 2021 30 Sep 2020 30 Sep 2019
Net Income 1.11B 357M 133M 1.14B
Depreciation 516M 449M 509M 336M
Change To Netincome -128M -64M 90M 206M
Change To Account Receivables -876M -497M 676M -121M
Change To Liabilities 839M 712M -921M 210M
Change To Inventory -122M -50M 102M -30M
Total Cash From Operating Activities 1.6B 1.17B 845M 1.95B
Capital Expenditures -282M -228M -271M -352M
Investments -67M -22M -22M -37M
Other Cashflows From Investing Activities 61M 33M 69M 57M
Total Cashflows From Investing Activities -874M -727M -1.03B -1.11B
Dividends Paid -418M -418M -427M -611M
Net Borrowings 228M -149M -339M -805M
Other Cashflows From Financing Activities -72M -72M -6M -5M
Total Cash From Financing Activities -693M -152M 1.2B -1.43B
Effect Of Exchange Rate 47M -25M -5M 9M
Change In Cash 76M 269M 1.01B -571M
Repurchase Of Stock -431M -3M -1M -4M