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).

MEL 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 Meridian Energy Limited (MEL), the free cash flow value is 355.00M.

All amounts in NZD

Operating Cash
431M
Capital Expenditure
-76M
Free Cash Flow
355.00M

Meridian 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).

MEL Cash Flow Statement History

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

30 Jun 202130 Jun 202030 Jun 201930 Jun 2018
Net Income428M175M339M201M
Depreciation285M288M250M247M
Change To Netincome-243M93M-39M-18M
Change To Account Receivables-169M-34M-32M-2M
Change To Liabilities214M75M39M-14M
Change To Operating Activities-60M-15M15M-21M
Total Cash From Operating Activities431M605M635M427M
Capital Expenditures-76M-43M-45M-33M
Total Cashflows From Investing Activities-114M-64M-69M-224M
Dividends Paid-433M-420M-437M-423M
Net Borrowings91M105M-46M261M
Total Cash From Financing Activities-345M-443M-546M-225M
Change In Cash-28M98M18M-20M
Repurchase Of Stock-3M-2M-2M-2M