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).

CEN 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 Contact Energy Limited (CEN), the free cash flow value is 295.00M.

All amounts in NZD

Operating Cash
432M
Capital Expenditure
-137M
Free Cash Flow
295.00M

Contact Energy Limited 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).

CEN Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Contact Energy Limited (NZX:CEN).

30 Jun 202130 Jun 202030 Jun 201930 Jun 2018
Net Income187M125M345M132M
Depreciation220M195M178M223M
Change To Netincome1M19M-160M94M
Change To Account Receivables-68M-8M-40M-16M
Change To Liabilities76M-17M-6M5M
Change To Inventory-35M-3M12M9M
Total Cash From Operating Activities432M341M401M457M
Capital Expenditures-137M-100M-63M-82M
Investments-8M-3M-8M-8M
Total Cashflows From Investing Activities-177M-106M319M-75M
Dividends Paid-274M-280M-251M-201M
Net Borrowings-267M42M-425M-99M
Total Cash From Financing Activities-149M-238M-676M-385M
Change In Cash106M-3M44M-3M
Issuance Of Stock392M392M392M1M