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 1.491B.

All amounts in GBP

Operating Cash
Capital Expenditure
Free Cash Flow

Rolls-Royce Holdings 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).

RR Cash Flow Statement History

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

31 Dec 2022 31 Dec 2021 31 Dec 2020 31 Dec 2019
Net Income -1.27B 120M -3.17B -1.31B
Depreciation 768M 803M 950M 988M
Change To Netincome 2.21B -86M 1.74B 286M
Change To Account Receivables 1.7B -641M -2.4B 1.81B
Change To Liabilities
Change To Inventory -887M -169M 588M -43M
Change To Operating Activities -857M -479M -927M 351M
Total Cash From Operating Activities 1.85B -259M -3.01B 2.3B
Capital Expenditures -359M -328M -585M -747M
Investments -32M -34M -18M -4M
Total Cashflows From Investing Activities 826M -428M -1.01B -918M
Dividends Paid -1M -3M -91M -220M
Net Borrowings -2.24B 666M 1.61B -1.39B
Other Cashflows From Financing Activities -624M -751M -462M -196M
Total Cash From Financing Activities -2.87B -88M 3.02B -1.79B
Effect Of Exchange Rate 156M -82M 56M -104M
Change In Cash -34M -857M -939M -517M