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).

WPP 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 WPP plc (WPP), the free cash flow value is 492.50M.

All amounts in GBP

Operating Cash
700.9M
Capital Expenditure
-208.4M
Free Cash Flow
492.50M

WPP 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).

WPP Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for WPP plc (LSE:WPP).

31 Dec 2022 31 Dec 2021 31 Dec 2020 31 Dec 2019
Net Income 682.7M 637.7M -2.97B 844.1M
Depreciation 511.7M 493.9M 609.4M 637.3M
Change To Netincome 353.2M 195.4M 3.57B 18.8M
Change To Account Receivables -498.6M -458.9M 585.2M 159M
Change To Liabilities 170.6M 777.8M 195M 394.7M
Change To Operating Activities -518.7M 383.1M 58M -203.4M
Total Cash From Operating Activities 700.9M 2.03B 2.05B 1.85B
Capital Expenditures -208.4M -263.2M -218.3M -339.3M
Investments 40M -47.3M 289.6M 2.44B
Total Cashflows From Investing Activities -408.9M -638.4M -163.4M 1.76B
Dividends Paid -365.4M -314.7M -122M -750.5M
Net Borrowings -530.2M -717.8M 332.7M -1.96B
Other Cashflows From Financing Activities -153.9M -210.4M -171M -165.3M
Total Cash From Financing Activities -1.91B -2.06B -250.5M -2.92B
Effect Of Exchange Rate 64.2M -130.1M -99.2M -89.7M
Change In Cash -1.55B -796.5M 1.54B 532.1M
Repurchase Of Stock -862.7M -818.5M -290.2M -43.8M
Issuance Of Stock 1.2M 4.4M 4.4M 600k