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
-259M
Capital Expenditure
-328M
Free Cash Flow
-587.00M

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 2021 31 Dec 2020 31 Dec 2019 31 Dec 2018
Net Income 120M -3.17B -1.31B -2.4B
Depreciation 803M 950M 988M 643M
Change To Netincome -86M 1.74B 286M 1.51B
Change To Account Receivables -641M -2.4B 1.81B -581M
Change To Liabilities 3.15B
Change To Inventory -169M 588M -43M -616M
Change To Operating Activities -479M -927M 351M 271M
Total Cash From Operating Activities -259M -3.01B 2.3B 2.23B
Capital Expenditures -328M -585M -747M -905M
Investments -22M -18M -4M -19M
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 Borrowings 666M 1.61B -1.39B 994M
Other Cashflows From Financing Activities -751M -462M -196M -76M
Total Cash From Financing Activities -88M 3.02B -1.79B 702M
Effect Of Exchange Rate -82M 56M -104M 66M
Change In Cash -857M -939M -517M 2.02B