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).

## ARU 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 Arafura Resources Limited (ARU), the free cash flow value is -12.07M.

All amounts in AUD

Operating Cash
-4.58M
Capital Expenditure
-7.49M
Free Cash Flow
-12.07M

Arafura Resources 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).

## ARU Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Arafura Resources Limited (ASX:ARU).

30 Jun 202030 Jun 201930 Jun 201830 Jun 2017
Net Income-4.81M-5.85M-5.12M-3.41M
Depreciation97.75k232.65k1.29M52.22k
Change To Netincome464k709.61k25.29k22.09k
Change To Account Receivables-155.84k147.99k78.53k-18.32k
Change To Liabilities-215.5k43.73k153.56k38.75k
Change To Operating Activities38.83k12.9k34.32k-14.11k
Total Cash From Operating Activities-4.58M-4.71M-3.53M-3.33M
Capital Expenditures-7.49M-9.93M-5.23M-3.42M
Investments-20.82k-20.82k-20.82k-20.82k
Other Cashflows From Investing Activities1.28M1.66M1.17M905.76k
Total Cashflows From Investing Activities-6.24M-8.25M-4.04M-2.2M
Net Borrowings-45.63k-45.63k-45.63k-45.63k
Other Cashflows From Financing Activities-2.01M-868.41k-198.15k-302.1k
Total Cash From Financing Activities28.19M10.48M2.98M6.46M
Effect Of Exchange Rate110229-491-780
Change In Cash17.37M-2.48M-4.6M928.66k
Issuance Of Stock30.25M11.35M3.17M6.76M