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Free cash flow
Operating cash flow minus capital spending: how it's worked out, why it can differ from net income, and why it doesn't work for banks.
The short answer
Free cash flow is the cash a company's operations bring in, minus what it spends on buildings, equipment and other long-lived assets. In fiscal 2025, Apple's operating cash flow was $111.5B and its capital spending was $12.7B, so its free cash flow was about $98.8B.
The formula
Free cash flow = cash from operating activities − capital expenditures
Both numbers are on the cash flow statement in the 10-K. Operating cash flow is net income adjusted to cash: it adds back costs that didn't use cash that year (depreciation, stock-based pay) and counts changes in what customers owe, inventory and bills not yet paid. Capital expenditures, often shortened to capex, are usually labeled purchases of property and equipment.
Free cash flow isn't defined by accounting rules, so companies and data sites sometimes calculate it differently. The version here is the simplest and most common one.
Why it can differ from net income
Net income records sales when they're earned and spreads the cost of a factory over many years as depreciation. Free cash flow counts the cash when it actually moves. A company that's building lots of new capacity can report rising profits while its free cash flow falls.
That's what happened at Microsoft in fiscal 2026. Operating cash flow rose 34.4% to $182.9B, and net income rose to $133.7B. Capital spending rose 79.6%, from $64.6B to $115.9B. Free cash flow fell 6.5%, from about $71.6B to about $67.0B.
Source: Microsoft 10-K for fiscal 2026, filed Jul 29, 2026
The gap can run the other way too. Coca-Cola's operating cash flow in fiscal 2025 was $7.4B, well below its net income of $13.1B. Tax payments, legal settlements and changes in what customers owe or what the company owes suppliers can move cash into a different year from the profit it relates to. The cash flow statement in the 10-K lists each adjustment.
Source: Coca-Cola 10-K for fiscal 2025, filed Feb 20, 2026
Negative free cash flow
Intel brought in $9.7B of operating cash in fiscal 2025 and spent $14.6B on property and equipment, much of it for chip factories, so free cash flow was about −$4.9B. Negative free cash flow means the company paid for its investment with cash it already had, borrowing, or money from partners. It's common during heavy building phases.
Source: Intel 10-K for fiscal 2025, filed Jan 23, 2026
Why banks are different
For banks, operating cash flow includes money moving in and out of trading positions and loans held for sale, so it can swing by tens of billions of dollars from one year to the next. JPMorgan Chase reported operating cash flow of −$147.8B for fiscal 2025 in a year when its net income was $57.0B. Free cash flow isn't a useful measure for a bank.
Source: JPMorgan Chase 10-K for fiscal 2025, filed Feb 13, 2026
Free cash flow for 69 companies
Latest fiscal year from each company's 10-K, sorted by free cash flow. Capital spending here is purchases of property, plant and equipment. Banks and brokers are left out (see above), and so are companies that report capital spending under a different line in their filings.
Common questions
How do you calculate free cash flow?
Take cash from operating activities and subtract capital expenditures, both from the cash flow statement. Apple's fiscal 2025 figures were $111.5B and $12.7B, for free cash flow of about $98.8B. Source: Apple 10-K for fiscal 2025.
Is free cash flow the same as profit?
No. Profit (net income) follows accrual accounting, which matches revenue and costs to the period they belong to. Free cash flow counts cash when it moves and takes out the full cost of new equipment in the year it's bought.
Is negative free cash flow bad?
Not on its own. It means a company spent more on long-lived assets than its operations brought in that year. That can come from a building program, a weak year, or both. The filing's discussion of cash flows (in Management's Discussion and Analysis) explains the company's own view.
What is free cash flow yield?
Free cash flow per share divided by the share price, or free cash flow divided by market cap. It's like an earnings yield built on cash instead of net income. It needs a share price, which Ticker Sage doesn't publish.
Where is the cash flow statement in a 10-K?
In Item 8, Financial Statements, usually right after the income statement and balance sheet. It has three sections: operating, investing (where capital spending sits) and financing (dividends, buybacks and borrowing).
Disclosures
- Editor holdings
- The editor holds shares of Tesla (TSLA) in a long-term retirement account. The editor holds no position in any other company named on this page. As of Oct 25, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Oct 26, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
More in Learn and Tools · Methodology & Disclosures explains where every number comes from.