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).

## PSN 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 Persimmon Plc (PSN), the free cash flow value is 763.90M.

All amounts in GBP

Operating Cash
784.8M
Capital Expenditure
-20.9M
Free Cash Flow
763.90M

Persimmon 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).

## PSN Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Persimmon Plc (LSE:PSN).

31 Dec 2021 31 Dec 2020 31 Dec 2019 31 Dec 2018
Net Income 787.2M 638.4M 848.8M 886.4M
Depreciation 14.5M 14.1M 13.3M 10M
Change To Netincome -3.9M -5.7M 33.5M 51.2M
Change To Account Receivables -59.5M -45.8M 6.3M -26.7M
Change To Liabilities 37.4M -116.9M -225.6M -82.7M
Change To Inventory -9.8M 265M -87.7M -225.5M
Change To Operating Activities 18.9M 16.4M 31.4M 41.6M
Total Cash From Operating Activities 784.8M 765.5M 620M 654.3M
Capital Expenditures -20.9M -18.9M -27.5M -15.5M
Investments 1.8M 1.8M 900k 900k
Total Cashflows From Investing Activities -18.2M -18.1M -25.9M -15M
Dividends Paid -749.6M -350.7M -747.8M -732.3M
Net Borrowings -3.3M -3.6M -3.8M -3.8M
Other Cashflows From Financing Activities -3.8M -6M -50.6M -163.1M
Total Cash From Financing Activities -754.1M -357.2M -798.3M -893.9M
Change In Cash 12.5M 390.2M -204.2M -254.6M
Issuance Of Stock 2.6M 3.1M 3.9M 2.8M