Cash flow After deducting interest, tax and dividend payments, £467 million of operating cash flow was available to fund our capital investment programme, demonstrating BAA’s continued strong conversion of operating profit to cash. The APP joint venture and the other investment property sales generated a further cash inflow of £625 million. The balance of the £1,403 million capital investment during the year was funded by increased net debt. The table below summarizes the Group’s cash flow movements during the year.

Discussion points

1 What do we learn about cash flow from the information in the table?
2 How does the description in words help the user to understand the information in the table? Chapter 3 Financial statements from the accounting equation 51 Contents

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Summary cash flow (2 million) Cash flow from operating activities Interest, tax and dividends Net cash flow from operations Capital expenditure and investment Cash impact of property transactions Other Increase in net debt (net of issue costs) 2005 957 (490) 467 (1,433) 625 31 (310) 2004 853 (447) 406 (1,266) (7) 15 (825)