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).

## 88E 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 88 Energy Limited (88E), the free cash flow value is -46.64M.

All amounts in AUD

Operating Cash
-5.12M
Capital Expenditure
-41.52M
Free Cash Flow
-46.64M

88 Energy Limited has a negative 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).

## 88E Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for 88 Energy Limited (ASX:88E).

31 Dec 202031 Dec 201931 Dec 201831 Dec 2017
Net Income-22.03M-36.78M-5.99M-8.41M
Depreciation11.48M29.53M50.61k3.95k
Change To Netincome5.42M1.43M-427.67k4.53M
Change To Account Receivables659.68k-76.5k-1.74M-45.08k
Change To Liabilities-700.18k35.35k1.47M-613.57k
Change To Operating Activities57k26.85k59.49k105.78k
Total Cash From Operating Activities-5.12M-5.84M-6.58M-4.43M
Capital Expenditures-41.52M-29.73M-35.11M-34.08M
Other Cashflows From Investing Activities32.18M23.86M12.16M11.32M
Total Cashflows From Investing Activities-9.34M-5.86M-22.95M-22.76M
Other Cashflows From Financing Activities-1.24M-461.5k-3.25M-1.92M
Total Cash From Financing Activities13.63M6.07M36.43M15.73M
Effect Of Exchange Rate-234.87k-184.23k820k-1.83M
Change In Cash-1.06M-5.82M7.71M-13.29M
Issuance Of Stock14.87M6.53M39.68M17.64M