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).

RKT 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 Reckitt Benckiser Group plc (RKT), the free cash flow value is 1.324B.

All amounts in GBP

Operating Cash
1.7B
Capital Expenditure
-373M
Free Cash Flow
1.324B

Reckitt Benckiser Group 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).

RKT Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Reckitt Benckiser Group plc (LSE:RKT).

31 Dec 202131 Dec 202031 Dec 201931 Dec 2018
Net Income-32M1.19B-3.68B2.16B
Depreciation363M415M467M365M
Change To Netincome1.61B939M4.79B52M
Change To Account Receivables-130M94M-150M-103M
Change To Liabilities-126M1.15B31M81M
Change To Inventory-57M-317M-87M-68M
Total Cash From Operating Activities1.7B3.52B1.41B2.52B
Capital Expenditures-373M-394M-306M-342M
Investments-27M-36M-18M-9M
Total Cashflows From Investing Activities239M-512M-442M-422M
Dividends Paid-1.25B-1.24B-1.23B-1.19B
Net Borrowings-1.01B-1.68B426M-1.62B
Other Cashflows From Financing Activities-109M-63M-90M11M
Total Cash From Financing Activities-2.29B-2.86B-830M-2.69B
Effect Of Exchange Rate-35M-52M-69M-54M
Change In Cash-385M97M70M-640M
Repurchase Of Stock-5M-4M-4M-4M
Issuance Of Stock80M131M61M105M