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).

## ALU 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 Altium Limited (ALU), the free cash flow value is 52.66M.

All amounts in USD

Operating Cash
56.53M
Capital Expenditure
-3.87M
Free Cash Flow
52.66M

Altium 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).

## ALU Cash Flow Statement History

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

30 Jun 202030 Jun 201930 Jun 201830 Jun 2017
Net Income30.88M52.89M37.49M28.08M
Depreciation10.39M5.14M4.42M3.75M
Change To Netincome2.79M6.68M1.92M2.39M
Change To Account Receivables-14.99M-6.6M-3.96M-685k
Change To Liabilities31.52M5.43M5.91M2.94M
Change To Inventory-983k-74k-74k-74k
Change To Operating Activities-4.6M479k2.98M-246k
Total Cash From Operating Activities56.53M69.07M48.48M35.86M
Capital Expenditures-3.87M-5.09M-2.82M-4.34M
Total Cashflows From Investing Activities-5.12M-13M-14.71M-9.04M
Dividends Paid-33.63M-28.13M-25.63M-20.79M
Net Borrowings-5.05M-7k-9k-51k
Total Cash From Financing Activities-38.68M-28.14M-25.64M-20.84M
Effect Of Exchange Rate-171k145k54k156k
Change In Cash12.55M28.07M8.19M6.13M