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).

AFI 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 Australian Foundation Investment Company Limited (AFI), the free cash flow value is 178.77M.

All amounts in AUD

Operating Cash
Capital Expenditure
Free Cash Flow

Australian Foundation Investment Company 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).

AFI Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Australian Foundation Investment Company Limited (NZX:AFI).

30 Jun 202130 Jun 202030 Jun 201930 Jun 2018
Net Income234.65M239.93M405.93M278.71M
Change To Netincome-25.4M-10.14M-74.02M-6.11M
Change To Account Receivables-12.79M22.78M9.61M-2.86M
Change To Liabilities949k-1.02M1.58M-1.04M
Change To Operating Activities-57k706k-417k-27k
Total Cash From Operating Activities178.77M254.63M351.76M281.16M
Other Cashflows From Investing Activities-23.8M-20.39M-6.41M-6.41M
Total Cashflows From Investing Activities28.98M-126.18M51.62M-64.64M
Dividends Paid-221.8M-223.43M-295.89M-222.43M
Other Cashflows From Financing Activities-145k-142k-141k-136k
Total Cash From Financing Activities-221.95M-223.57M-296.13M-222.46M
Change In Cash-14.2M-95.11M107.25M-5.94M