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 3.028B.

All amounts in GBP

Operating Cash
3.65B
Capital Expenditure
-626M
Free Cash Flow
3.028B

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 202130 Jun 202030 Jun 201930 Jun 2018
Net Income2.66B1.41B3.16B3.02B
Depreciation403M418M374M368M
Change To Netincome216M759M-64M-147M
Change To Account Receivables-446M523M11M-202M
Change To Liabilities1.22B-485M201M314M
Change To Inventory-443M-366M-434M-271M
Total Cash From Operating Activities3.65B2.32B3.25B3.08B
Capital Expenditures-626M-700M-671M-584M
Total Cashflows From Investing Activities-1.09B-805M-270M-1.15B
Dividends Paid-1.65B-1.65B-1.62B-1.58B
Net Borrowings-969M4.08B2.32B1.01B
Other Cashflows From Financing Activities-119M-173M-896M-54M
Total Cash From Financing Activities-2.79B1.04B-2.92B-2.12B
Effect Of Exchange Rate-285M-120M-26M-39M
Change In Cash-516M2.43B28M-224M
Repurchase Of Stock-109M-1.28B-2.77B-1.51B
Issuance Of Stock49M55M51M9M