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).

## DGE 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 Diageo plc (DGE), the free cash flow value is 2.838B.

All amounts in GBP

Operating Cash
3.94B
Capital Expenditure
-1.1B
Free Cash Flow
2.838B

Diageo 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).

## DGE Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Diageo plc (LSE:DGE).

30 Jun 2022 30 Jun 2021 30 Jun 2020 30 Jun 2019
Net Income 3.25B 2.66B 1.41B 3.16B
Depreciation 454M 403M 1.04B 374M
Change To Netincome 373M 216M 195M -64M
Change To Account Receivables -378M -446M 523M 11M
Change To Liabilities 939M 1.22B -485M 201M
Change To Inventory -740M -443M -366M -434M
Total Cash From Operating Activities 3.94B 3.65B 2.32B 3.25B
Capital Expenditures -1.1B -626M -700M -671M
Total Cashflows From Investing Activities -1.34B -1.09B -805M -270M
Dividends Paid -1.72B -1.65B -1.65B -1.62B
Net Borrowings 821M -969M 4.08B 2.32B
Other Cashflows From Financing Activities -96M -119M -173M -896M
Total Cash From Financing Activities -3.26B -2.79B 1.04B -2.92B
Effect Of Exchange Rate 239M -285M -120M -26M
Change In Cash -426M -516M 2.43B 28M
Repurchase Of Stock -2.28B -109M -1.28B -2.77B
Issuance Of Stock 18M 49M 55M 51M