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How strong is cash generation?

April 26, 2017cash generation strong

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How strong is cash generation?

1 Answer

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Strong cash generation is a key company objective, with a target of delivering high cash conversion of operating profit in each financial year. Cash conversion is defined as operating cash flow as a percentage of adjusted operating profit. In 2008, cash conversion was 86% (2007: 99%). The lower cash conversion was a result of a combination of capital expenditure (£21.9m), net of disposals (£0.9m) being £7.5m higher than depreciation, and a build in working capital towards the second half of the year.