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).

RIO 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 Rio Tinto Group (RIO), the free cash flow value is 17.961B.

All amounts in USD

Operating Cash
25.34B
Capital Expenditure
-7.38B
Free Cash Flow
17.961B

Rio Tinto Group 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).

RIO Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Rio Tinto Group (LSE:RIO).

31 Dec 2021 31 Dec 2020 31 Dec 2019 31 Dec 2018
Net Income 21.09B 9.77B 8.01B 13.64B
Depreciation 4.5B 4.46B 4.25B 3.88B
Change To Netincome 1.11B 1.81B 2.45B -5.3B
Change To Account Receivables -367M -562M 163M -421M
Change To Liabilities 685M 558M -191M 476M
Change To Inventory -1.4B -281M 28M -587M
Change To Operating Activities -480M -25M 68M 68M
Total Cash From Operating Activities 25.34B 15.88B 14.91B 11.82B
Capital Expenditures -7.38B -6.19B -5.49B -5.43B
Investments 75M 15M 7M -1.56B
Other Cashflows From Investing Activities 85M -437M 11M -1M
Total Cashflows From Investing Activities -7.16B -6.56B -5.5B 1.32B
Dividends Paid -10.95B -6.13B -5.4B -5.36B
Net Borrowings -577M -920M -438M -2.25B
Other Cashflows From Financing Activities 100M 130M 105M 37M
Total Cash From Financing Activities -15.86B -7.13B -12.22B -12.95B
Effect Of Exchange Rate 100M 165M -54M 151M
Change In Cash 2.42B 2.35B -2.86B 342M