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).

SGE 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 The Sage Group plc (SGE), the free cash flow value is 337.00M.

All amounts in GBP

Operating Cash
376M
Capital Expenditure
-39M
Free Cash Flow
337.00M

The Sage 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).

SGE Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for The Sage Group plc (LSE:SGE).

30 Sep 202130 Sep 202030 Sep 201930 Sep 2018
Net Income285M310M266M295M
Depreciation48M61M38M37M
Change To Netincome-99M-76M36M50M
Change To Account Receivables-35M26M18M7M
Change To Liabilities144M54M84M-29M
Total Cash From Operating Activities376M406M472M393M
Capital Expenditures-39M-24M-27M-20M
Investments-21M-21M17M17M
Other Cashflows From Investing Activities1M3M3M4M
Total Cashflows From Investing Activities62M179M7M-58M
Dividends Paid-189M-186M-181M-171M
Net Borrowings-159M97M-180M-59M
Other Cashflows From Financing Activities-1M-1M-79M-1M
Total Cash From Financing Activities-694M-88M-437M-228M
Effect Of Exchange Rate-25M-21M8M2M
Change In Cash-281M476M50M109M
Repurchase Of Stock-353M-7M-7M-7M
Issuance Of Stock8M9M3M3M