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