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