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).

SHEL 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 Shell plc (SHEL), the free cash flow value is 26.104B.

All amounts in USD

Operating Cash
45.1B
Capital Expenditure
-19B
Free Cash Flow
26.104B

Shell 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).

SHEL Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Shell plc (LSE:SHEL).

31 Dec 2021 31 Dec 2020 31 Dec 2019 31 Dec 2018
Net Income 20.1B -21.68B 15.84B 23.35B
Depreciation 25.03B 45.95B 29.45B 21.5B
Change To Netincome 10.34B 5.23B 1.66B 4.79B
Change To Account Receivables -20.57B 9.62B -921M 1.96B
Change To Liabilities 17.52B -9.49B -1.22B -1.34B
Change To Inventory -7.32B 4.48B -2.63B 2.82B
Total Cash From Operating Activities 45.1B 34.1B 42.18B 53.09B
Capital Expenditures -19B -16.59B -22.97B -23.01B
Investments 183M 279M 2.12B 5.03B
Other Cashflows From Investing Activities -177M 539M 269M -46M
Total Cashflows From Investing Activities -4.76B -13.28B -15.78B -13.66B
Dividends Paid -6.25B -7.42B -15.2B -15.68B
Net Borrowings -19.73B 5.58B -3.42B -8.33B
Other Cashflows From Financing Activities -5.51B -3.3B -5.23B -3.48B
Total Cash From Financing Activities -34.66B -7.22B -35.21B -32.55B
Effect Of Exchange Rate -539M 172M 124M -449M
Change In Cash 5.14B 13.78B -8.69B 6.43B
Repurchase Of Stock -3.17B -2.08B -11.36B -5.06B