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
Capital Expenditure
Free Cash Flow

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