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).

PRU 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 Prudential plc (PRU), the free cash flow value is -181.00M.

All amounts in USD

Operating Cash
-145M
Capital Expenditure
-36M
Free Cash Flow
-181.00M

Prudential plc has a negative 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).

PRU Cash Flow Statement History

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

31 Dec 202131 Dec 202031 Dec 201931 Dec 2018
Net Income-2.04B2.12B783M4.02B
Depreciation169M186M465M465M
Change To Netincome4.51B4.51B-3.87B-118M
Change To Liabilities
Change To Operating Activities-2.78B-338M-2B-541M
Total Cash From Operating Activities-145M1.97B-5.31B3.36B
Capital Expenditures-36M-57M-64M-134M
Total Cashflows From Investing Activities-726M-1.2B-778M-1.05B
Dividends Paid-421M-814M-1.63B-1.66B
Net Borrowings-373M855M-274M1.53B
Other Cashflows From Financing Activities2.01B158M-708M-683M
Total Cash From Financing Activities3.59B212M-2.59B-796M
Effect Of Exchange Rate-44M70M203M-529M
Change In Cash-848M1.05B-8.48B981M
Issuance Of Stock2.38B13M22M23M