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).

ABV 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 Advanced Braking Technology Limited (ABV), the free cash flow value is 938000.

All amounts in AUD

Operating Cash
1.21M
Capital Expenditure
-274k
Free Cash Flow
938000

Advanced Braking Technology 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).

ABV Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Advanced Braking Technology Limited (ASX:ABV).

30 Jun 202130 Jun 202030 Jun 201930 Jun 2018
Net Income620k171k-1.71M-1.66M
Depreciation243k264k211k219k
Change To Netincome109k120k120k120k
Change To Account Receivables-150k20k49k838k
Change To Liabilities198k-123k101k-528k
Change To Inventory229k-165k-307k-510k
Change To Operating Activities-38k-51k196k42k
Total Cash From Operating Activities1.21M242k-1.45M-1.55M
Capital Expenditures-274k-26k-133k-224k
Total Cashflows From Investing Activities-274k53k-133k-224k
Net Borrowings-18k-427k288k523k
Other Cashflows From Financing Activities-25k-68k-98k-98k
Total Cash From Financing Activities-43k-495k1.67M673k
Change In Cash895k-200k89k-1.11M