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).

HIK 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 Hikma Pharmaceuticals PLC (HIK), the free cash flow value is 493.00M.

All amounts in USD

Operating Cash
638M
Capital Expenditure
-145M
Free Cash Flow
493.00M

Hikma Pharmaceuticals 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).

HIK Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Hikma Pharmaceuticals PLC (LSE:HIK).

31 Dec 202131 Dec 202031 Dec 201931 Dec 2018
Net Income421M431M486M282M
Depreciation169M125M107M99M
Change To Netincome67M106M-87M64M
Change To Account Receivables-166M-47M21M-41M
Change To Liabilities14M6M-6M88M
Change To Inventory38M-180M-25M-51M
Change To Operating Activities84M13M-34M-21M
Total Cash From Operating Activities638M464M472M430M
Capital Expenditures-145M-172M-119M-107M
Investments3M-3M8M-4M
Other Cashflows From Investing Activities-12M-56M33M48M
Total Cashflows From Investing Activities-238M-283M-151M-96M
Dividends Paid-120M-109M-97M-84M
Net Borrowings-114M220M-10M-141M
Other Cashflows From Financing Activities-53M-34M-48M-53M
Total Cash From Financing Activities-287M-298M-155M-278M
Effect Of Exchange Rate-10M-2M-2M-7M
Change In Cash103M-119M166M49M