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
Capital Expenditure
Free Cash Flow

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