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 202131 Dec 202031 Dec 201931 Dec 2018
Net Income21.09B9.77B8.01B13.64B
Depreciation4.5B4.46B4.25B3.88B
Change To Netincome1.11B1.81B2.45B-5.3B
Change To Account Receivables-367M-562M163M-421M
Change To Liabilities685M558M-191M476M
Change To Inventory-1.4B-281M28M-587M
Change To Operating Activities-480M-25M68M68M
Total Cash From Operating Activities25.34B15.88B14.91B11.82B
Capital Expenditures-7.38B-6.19B-5.49B-5.43B
Investments75M15M7M-1.56B
Other Cashflows From Investing Activities85M-437M11M-1M
Total Cashflows From Investing Activities-7.16B-6.56B-5.5B1.32B
Dividends Paid-10.95B-6.13B-5.4B-5.36B
Net Borrowings-577M-920M-438M-2.25B
Other Cashflows From Financing Activities100M130M105M37M
Total Cash From Financing Activities-15.86B-7.13B-12.22B-12.95B
Effect Of Exchange Rate100M165M-54M151M
Change In Cash2.42B2.35B-2.86B342M