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 202230 Jun 202130 Jun 202030 Jun 2019
Net Income3.25B2.66B1.41B3.16B
Depreciation454M403M1.84B374M
Change To Netincome373M216M-600M-64M
Change To Account Receivables-378M-446M523M11M
Change To Liabilities939M1.22B-485M201M
Change To Inventory-740M-443M-366M-434M
Total Cash From Operating Activities3.94B3.65B2.32B3.25B
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 Borrowings821M-969M4.08B2.32B
Other Cashflows From Financing Activities-96M-119M-173M-896M
Total Cash From Financing Activities-3.26B-2.79B1.04B-2.92B
Effect Of Exchange Rate239M-285M-120M-26M
Change In Cash-426M-516M2.43B28M
Repurchase Of Stock-2.28B-109M-1.28B-2.77B
Issuance Of Stock18M49M55M51M