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 943.00M.

All amounts in GBP

Operating Cash
1.17B
Capital Expenditure
-228M
Free Cash Flow
943.00M

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 202130 Sep 202030 Sep 201930 Sep 2018
Net Income357M133M1.14B1.13B
Depreciation449M509M336M306M
Change To Netincome-64M90M206M69M
Change To Account Receivables-497M676M-121M-208M
Change To Liabilities712M-921M210M364M
Change To Inventory-50M102M-30M-30M
Total Cash From Operating Activities1.17B845M1.95B1.85B
Capital Expenditures-228M-271M-352M-359M
Investments-22M-22M-37M-39M
Other Cashflows From Investing Activities33M69M57M41M
Total Cashflows From Investing Activities-727M-1.03B-1.11B-1.11B
Net Borrowings-149M-339M-805M426M
Total Cash From Financing Activities-152M1.2B-1.43B-135M
Effect Of Exchange Rate-25M-5M9M2M
Change In Cash269M1.01B-571M582M
Repurchase Of Stock-3M-1M-4M-4M