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).

IHG 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 InterContinental Hotels Group PLC (IHG), the free cash flow value is 619.00M.

All amounts in USD

Operating Cash
636M
Capital Expenditure
-17M
Free Cash Flow
619.00M

InterContinental Hotels Group 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).

IHG Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for InterContinental Hotels Group PLC (LSE:IHG).

31 Dec 202131 Dec 202031 Dec 201931 Dec 2018
Net Income266M-260M385M349M
Depreciation68M74M116M91M
Change To Netincome127M289M208M90M
Change To Account Receivables-75M38M-70M-43M
Change To Liabilities227M-43M15M152M
Change To Inventory1M1M1M1M
Change To Operating Activities-8M2M-1M-3M
Total Cash From Operating Activities636M137M653M709M
Capital Expenditures-17M-27M-80M-51M
Investments9M15M-15M6M
Total Cashflows From Investing Activities-12M-61M-493M-197M
Net Borrowings-860M1.35B68M251M
Total Cash From Financing Activities-860M1.35B-660M51M
Effect Of Exchange Rate3M86M8M-21M
Change In Cash-233M1.52B-492M542M