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