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).

HSV 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 HomeServe plc (HSV), the free cash flow value is 201.40M.

All amounts in GBP

Operating Cash
207.6M
Capital Expenditure
-6.2M
Free Cash Flow
201.40M

HomeServe 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).

HSV Cash Flow Statement History

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

31 Mar 202231 Mar 202131 Mar 202031 Mar 2019
Net Income132.8M31.1M106M108.5M
Depreciation80.8M79.2M66.6M41.2M
Change To Netincome1.9M93.5M21M10M
Change To Account Receivables-26.1M-20M-46.3M104M
Change To Liabilities-10.2M-4.3M3.2M-133.7M
Change To Inventory-4.9M-800k-1M-700k
Total Cash From Operating Activities207.6M223M192M162M
Capital Expenditures-6.2M-7.1M-8.2M-9M
Investments-3.6M-2.2M8.4M-5.4M
Other Cashflows From Investing Activities-1.2M100k500k200k
Total Cashflows From Investing Activities-194.3M-154.4M-217.6M-158.4M
Dividends Paid-89.3M-80.5M-73.5M-65M
Net Borrowings98.6M41.1M170.2M74.7M
Other Cashflows From Financing Activities-18.5M-2.2M-8.5M-1.6M
Total Cash From Financing Activities-9.2M-41.6M85.3M10.3M
Effect Of Exchange Rate4M-8.8M-1.1M900k
Change In Cash8.1M18.2M58.6M14.8M