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).

ATM 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 The a2 Milk Company Limited (ATM), the free cash flow value is 83.74M.

All amounts in NZD

Operating Cash
89.42M
Capital Expenditure
-5.67M
Free Cash Flow
83.74M

The a2 Milk 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).

ATM Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for The a2 Milk Company Limited (NZX:ATM).

30 Jun 202130 Jun 202030 Jun 201930 Jun 2018
Net Income80.66M385.84M287.74M195.68M
Depreciation7.38M4.28M2.02M1.51M
Change To Netincome-20.15M3.62M5.69M-2.83M
Change To Account Receivables5.42M-4.45M-7.12M7.38M
Change To Liabilities-14.85M110.91M65.45M44.86M
Change To Inventory35.13M-38.88M-44.35M-35.66M
Change To Operating Activities28.52M-6.64M-13.68M-58k
Total Cash From Operating Activities89.42M427.41M289.07M231.11M
Capital Expenditures-5.67M-5.8M-2.65M-2.53M
Investments-39.84M-21.86M-162.34M-16.07M
Total Cashflows From Investing Activities-64.37M-29.08M-165.7M-20.92M
Net Borrowings-3.23M-1.77M-1.77M-1.77M
Other Cashflows From Financing Activities-19k-71k-41k-52k
Total Cash From Financing Activities-1.04M-11.99M2.93M7.26M
Effect Of Exchange Rate-3.03M3.03M-1.95M1.98M
Change In Cash20.97M389.37M124.35M219.44M
Issuance Of Stock2.21M2.51M2.97M7.32M