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).

## ERD 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 EROAD Limited (ERD), the free cash flow value is -14.10M.

All amounts in NZD

Operating Cash
14.3M
Capital Expenditure
-28.4M
Free Cash Flow
-14.10M

EROAD 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).

## ERD Cash Flow Statement History

Following table shows the history of Cash Flow Statements sheet for EROAD Limited (NZX:ERD).

31 Mar 2022 31 Mar 2021 31 Mar 2020 31 Mar 2019
Net Income -9.6M 2.5M 1M -4.9M
Depreciation 11.2M 8.6M 8.4M 6.7M
Change To Netincome 300k -1M -1M -900k
Change To Account Receivables -10.4M 2.7M -200k 1.1M
Change To Liabilities 5.8M -1.4M 800k 1M
Total Cash From Operating Activities 14.3M 28.1M 23.1M 14.2M
Capital Expenditures -28.4M -4.7M -11.6M -10.9M
Total Cashflows From Investing Activities -134.6M -22.8M -35.9M -27.3M
Net Borrowings -4.5M -2.4M 100k 7.3M
Other Cashflows From Financing Activities -3.4M -2.1M -2.1M -2.1M
Total Cash From Financing Activities 77.1M 48.4M 100k 7.3M
Change In Cash -43.2M 53.7M -12.7M -5.8M
Issuance Of Stock 85M 52.9M 52.9M 52.9M