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