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).

RR 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 Rolls-Royce Holdings plc (RR), the free cash flow value is -587.00M.

All amounts in GBP

Operating Cash
Capital Expenditure
Free Cash Flow

Rolls-Royce Holdings plc has a negative 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).

RR Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Rolls-Royce Holdings plc (LSE:RR).

31 Dec 202131 Dec 202031 Dec 201931 Dec 2018
Net Income120M-3.17B-1.31B-2.4B
Change To Netincome-86M1.74B286M1.51B
Change To Account Receivables-641M-2.4B1.81B-581M
Change To Liabilities3.15B
Change To Inventory-169M588M-43M-616M
Change To Operating Activities-479M-927M351M271M
Total Cash From Operating Activities-259M-3.01B2.3B2.23B
Capital Expenditures-328M-585M-747M-905M
Other Cashflows From Investing Activities-12M-12M-12M-12M
Total Cashflows From Investing Activities-428M-1.01B-918M-975M
Dividends Paid-3M-91M-220M-216M
Net Borrowings666M1.61B-1.39B994M
Other Cashflows From Financing Activities-751M-462M-196M-76M
Total Cash From Financing Activities-88M3.02B-1.79B702M
Effect Of Exchange Rate-82M56M-104M66M
Change In Cash-857M-939M-517M2.02B