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).

## ADH 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 Adairs Limited (ADH), the free cash flow value is 89.78M.

All amounts in AUD

Operating Cash
97.31M
Capital Expenditure
-7.53M
Free Cash Flow
89.78M

Adairs 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).

## ADH Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Adairs Limited (ASX:ADH).

28 Jun 202030 Jun 201901 Jul 201802 Jul 2017
Net Income35.28M29.64M30.56M21.02M
Depreciation38.61M6.39M5.72M5.16M
Change To Netincome344k156k203k257k
Change To Account Receivables-818k-1.11M-1.9M2.11M
Change To Liabilities-994k5.39M1.05M11.8M
Change To Inventory7.08M-8.96M-576k-6.72M
Change To Operating Activities10.25M1.89M1.42M1.24M
Total Cash From Operating Activities97.31M35.02M39.09M27.64M
Capital Expenditures-7.53M-6.96M-7.09M-11.33M
Total Cashflows From Investing Activities-50.04M-6.96M-7.09M-11.33M
Dividends Paid-13.27M-24.05M-16.59M-16.59M
Net Borrowings-25.89M-25.89M-17M-17M
Other Cashflows From Financing Activities-865k-50k-50k-89k
Total Cash From Financing Activities-40.02M-24.1M-33.59M-16.68M
Effect Of Exchange Rate-33k34k-4k-4k
Change In Cash7.21M3.99M-1.59M-363k