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).

## DOW 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 Downer EDI Ltd (DOW), the free cash flow value is 238.00M.

All amounts in

Operating Cash
441.6M
Capital Expenditure
-203.6M
Free Cash Flow
238.00M

Downer EDI Ltd 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).

## DOW Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for Downer EDI Ltd (NZX:DOW).

30 Jun 2017 30 Jun 2016 30 Jun 2015 30 Jun 2014
Net Income 181.5M 180.6M 210.2M 216M
Depreciation 220.2M 258.7M 253.1M 266.4M
Change To Netincome 10.3M 36.4M -11.4M 37.9M
Change To Account Receivables -159.8M -23.4M 121.3M 341.8M
Change To Liabilities 160.7M -71.9M -61.6M -203.8M
Change To Inventory 38.7M 18.5M 40.2M -32.5M
Change To Operating Activities -13M 46.3M -68M -44.8M
Total Cash From Operating Activities 441.6M 447.8M 486.5M 583.4M
Capital Expenditures -203.6M -185.7M -177.6M -379.5M
Investments 600k -900k -53.1M -15.5M
Other Cashflows From Investing Activities 1.2M 1.2M 1.2M 600k
Total Cashflows From Investing Activities -995.8M -205.5M -498.2M -278.8M
Dividends Paid -110.6M -113.1M -114.8M -95.6M
Net Borrowings -48.8M 93.8M 79.7M -260.9M
Total Cash From Financing Activities 830.5M -45.8M -46.8M -356.5M
Effect Of Exchange Rate -1.1M 700k -1.1M 3.8M
Change In Cash 275.2M 197.2M -59.6M -48.1M