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).

GSK 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 GSK plc (GSK), the free cash flow value is 6.78B.

All amounts in GBP

Operating Cash
7.95B
Capital Expenditure
-1.17B
Free Cash Flow
6.78B

GSK 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).

GSK Cash Flow Statement History

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

31 Dec 202131 Dec 202031 Dec 201931 Dec 2018
Net Income4.38B5.75B4.64B3.62B
Depreciation2.15B2.11B2.33B1.86B
Change To Netincome993M-838M769M3.17B
Change To Account Receivables-782M-224M-32M-429M
Change To Liabilities284M225M263M131M
Change To Inventory25M119M300M51M
Change To Operating Activities670M1.06B-259M18M
Total Cash From Operating Activities7.95B8.44B8.02B8.42B
Capital Expenditures-1.17B-1.23B-1.26B-1.34B
Investments334M2.85B-199M-165M
Other Cashflows From Investing Activities36M70M89M111M
Total Cashflows From Investing Activities-1.78B2.16B-5.35B-1.55B
Dividends Paid-4B-3.98B-3.95B-3.93B
Net Borrowings-2.21B-4.23B3.52B8.12B
Other Cashflows From Financing Activities-1.4B-1.95B-1.45B-10.66B
Total Cash From Financing Activities-7.59B-10.13B-1.84B-6.39B
Effect Of Exchange Rate-29M-39M-82M8M
Change In Cash-1.44B431M744M487M
Issuance Of Stock21M29M51M74M