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).

## RTO 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 Rentokil Initial plc (RTO), the free cash flow value is 435.40M.

All amounts in GBP

Operating Cash
563.2M
Capital Expenditure
-127.8M
Free Cash Flow
435.40M

Rentokil Initial 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).

## RTO Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Rentokil Initial plc (LSE:RTO).

31 Dec 2021 31 Dec 2020 31 Dec 2019 31 Dec 2018
Net Income 263.2M 186.3M 283.8M -98.3M
Depreciation 275.5M 275M 286.4M 192.1M
Change To Netincome -15.1M 13.9M -109.9M 257.5M
Change To Account Receivables 58.7M -40.9M -38.2M -14.4M
Change To Liabilities -31.9M 90.9M 37.1M 28M
Change To Inventory -3.2M -23.3M -3.6M -10.9M
Change To Operating Activities -4.8M -1.9M -6.3M -6.9M
Total Cash From Operating Activities 563.2M 523.4M 462.9M 363.6M
Capital Expenditures -127.8M -129.9M -140.1M -147.2M
Investments 170.6M -170.5M -170.5M -170.5M
Other Cashflows From Investing Activities 3.9M 11.7M 30.4M 11.9M
Total Cashflows From Investing Activities -441.1M -497.5M -61.1M -456.8M
Dividends Paid -138.7M -138.7M -85.8M -74.2M
Net Borrowings -249.9M 277.2M -124.5M -33.4M
Other Cashflows From Financing Activities -28.5M -23.7M -11M -8.1M
Total Cash From Financing Activities -417.1M 253.5M -221.3M -115.7M
Effect Of Exchange Rate -13.9M -2.5M -7.5M 5.7M
Change In Cash -308.9M 276.9M 173M -203.2M