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).

## ALA 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 Arovella Therapeutics Limited (ALA), the free cash flow value is -3.71M.

All amounts in AUD

Operating Cash
-3.54M
Capital Expenditure
-166.11k
Free Cash Flow
-3.71M

Arovella Therapeutics 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).

## ALA Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Arovella Therapeutics Limited (ASX:ALA).

30 Jun 202130 Jun 202030 Jun 201930 Jun 2018
Net Income-5.05M-9.94M-7.8M-5.46M
Depreciation203.18k222.97k121.72k98.46k
Change To Netincome1.31M5.97M6.47M136.39k
Change To Account Receivables335.53k251.34k-330.14k42.4k
Change To Liabilities-453.24k564.51k-1.36M2.57M
Change To Operating Activities-339.44k-311.03k84.23k-23.41k
Total Cash From Operating Activities-3.54M-2.88M-2.5M-2.55M
Capital Expenditures-166.11k-141.09k-312.71k-68.31k
Total Cashflows From Investing Activities-514.55k-388.42k-1.38M676.34k
Net Borrowings-57.58k-63.94k-63.94k200k
Other Cashflows From Financing Activities-724.49k-724.49k-724.49k-724.49k
Total Cash From Financing Activities9.8M-63.94k8.1M200k
Change In Cash5.74M-3.34M4.22M-1.67M
Issuance Of Stock10.58M10.58M8.1M8.1M