Business & Corporate6 min read
How to Read a Cash Flow Statement: Operating, Investing and Financing
A line-by-line guide to the three sections of a cash flow statement, using Apple's fiscal 2025 and Boeing's 2024–2025 statements to show what each reveals.
By Daily Forex Report Business Desk
The income statement says what a company earned. The cash flow statement says where its cash came from and where it went. Both start from the same business, but the cash flow statement is harder to dress up. This guide walks through the three sections using two real statements, Apple's for fiscal 2025 and Boeing's for 2024 and 2025, and ends with a list of questions to ask of any statement.
The structure
The SEC staff's guide to the statement describes it as one of the primary financial statements that "ultimately reconciles the changes in the entity's cash balance." There are three sections:
The three subtotals add up to the change in cash (plus the effect of exchange rates, where reported). Most companies use the indirect method for the operating section, which, in the SEC's words, "starts with net income and adjusts for changes that did not affect cash (such as depreciation)" and for "changes in current assets and current liabilities."
- Operating activities: "activities or transactions generally related to the principal business operations of the entity."
- Investing activities: activities connected with "the purchase or sale of long-term assets or investments."
- Financing activities: activities that "directly affect the entity's owners or creditors due to the entity's need for financing."
Walking through Apple's statement
These are Apple's condensed consolidated statements of cash flows from its fourth-quarter 2025 earnings release (unaudited, $ millions, fiscal years ended 27 September 2025 and 28 September 2024). We checked that each section adds up to its reported subtotal.
Operating activities
How to read it:
Operating cash flow was 99.5% of net income in fiscal 2025 and 126.2% in fiscal 2024 (our calculation). A ratio persistently well above or below 100% is a prompt to read the lines above.
| FY2025 | FY2024 | |
|---|---|---|
| Net income | 112,010 | 93,736 |
| Depreciation and amortization | 11,698 | 11,445 |
| Share-based compensation expense | 12,863 | 11,688 |
| Other | (89) | (2,266) |
| Accounts receivable, net | (6,682) | (3,788) |
| Vendor non-trade receivables | (347) | (1,356) |
| Inventories | 1,400 | (1,046) |
| Other current and non-current assets | (9,197) | (11,731) |
| Accounts payable | 902 | 6,020 |
| Other current and non-current liabilities | (11,076) | 15,552 |
| Cash generated by operating activities | 111,482 | 118,254 |
- Add-backs. Depreciation and share-based compensation are expenses that reduce net income but involve no cash that year. Together with "Other", they add $24.5 billion in fiscal 2025 and $20.9 billion in fiscal 2024 (our calculation).
- Working capital. The six working-capital lines total −$25.0billioninfiscal2025and+$3.7 billion in fiscal 2024 (our calculation). A negative figure means cash was tied up, for example when receivables grow faster than they are collected.
- The swing in "other liabilities". It moved from \+$15.6billionto-$11.1 billion, and cash paid for income taxes rose from $26.1 billion to $43.4 billion. Apple's fiscal 2024 net income included a one-time income tax charge of $10.2 billion, net, according to its fourth-quarter 2024 8-K. The pattern is consistent with a charge recorded in one year and paid in the next, but the statement does not say so, so check the notes in the 10-K before drawing that conclusion.
Investing activities
The investing total is positive, which looks odd for a company that is spending on equipment. The reason is that most of the section is Apple moving cash in and out of marketable securities. Net of purchases, maturities and sales, securities produced a $29.4 billion inflow in fiscal 2025 and $13.7 billion in fiscal 2024 (our calculation). The line that measures investment in the business is payments for property, plant and equipment: $12.7 billion and $9.4 billion. A positive investing total does not mean the company is shrinking.
| FY2025 | FY2024 | |
|---|---|---|
| Purchases of marketable securities | (24,407) | (48,656) |
| Proceeds from maturities of marketable securities | 40,907 | 51,211 |
| Proceeds from sales of marketable securities | 12,890 | 11,135 |
| Payments for property, plant and equipment | (12,715) | (9,447) |
| Other | (1,480) | (1,308) |
| Cash generated by investing activities | 15,195 | 2,935 |
Financing activities
Almost all of the outflow is returns to shareholders. Dividends and buybacks together were $106.1 billion in fiscal 2025 and $110.2 billion in fiscal 2024\. With free cash flow (operating cash flow minus property, plant and equipment payments) of $98.8 billion and $108.8 billion, those payouts were 107.5% and 101.3% of free cash flow (our calculation). In our reading, the fiscal 2025 shortfall was covered in part by the net inflow from securities in the investing section, and cash still rose by $6.0 billion to $35.9 billion.
| FY2025 | FY2024 | |
|---|---|---|
| Taxes paid on net share settlement of equity awards | (5,960) | (5,441) |
| Dividends and dividend equivalents | (15,421) | (15,234) |
| Repurchases of common stock | (90,711) | (94,949) |
| Proceeds from term debt, net | 4,481 | — |
| Repayments of term debt | (10,932) | (9,958) |
| Commercial paper, net | (2,032) | 3,960 |
| Other | (111) | (361) |
| Cash used in financing activities | (120,686) | (121,983) |
The cash identity
For fiscal 2025: 111,482 \+ 15,195 − 120,686 \= 5,991, and 29,943 \+ 5,991 \= 35,934, the ending cash balance. If a statement's sections do not reconcile to the change in cash, you have misread a line.
A second reading: Boeing, 2024 and 2025
Boeing's statement shows what a stressed or recovering company looks like. The figures come from its fourth-quarter 2025 earnings release ($ millions):
Boeing defines free cash flow as GAAP operating cash flow reduced by capital expenditures, which gives −$14.3billionfor2024and-$1.9 billion for 2025\.
Three points:
(Boeing's other-investing line also contains $51.9 billion of contributions to investments and $46.6 billion of proceeds from investments in 2025, gross flows that largely offset. This is a reminder to look at the detail before reading a net figure.)
| 2024 | 2025 | |
|---|---|---|
| Net earnings (loss) | (11,829) | 2,238 |
| Non-cash items, net | 8,517 | (171) |
| Working capital changes, net | (8,768) | (1,002) |
| Operating activities | (12,080) | 1,065 |
| Capital expenditures | (2,230) | (2,942) |
| Other investing, net | (9,743) | 3,441 |
| Investing activities | (11,973) | 499 |
| New borrowings | 10,161 | 165 |
| Debt repayments | (8,673) | (3,621) |
| Common stock issuance, net | 18,200 | — |
| Mandatory convertible preferred issuance, net | 5,657 | — |
| Financing activities | 25,209 | (3,763) |
- 2024: losses funded by financing. Operating cash flow was −$12.1 billion, roughly in line with the $11.8 billion net loss. The financing section shows how the gap was met: $18.2 billion of common stock and $5.7 billion of mandatory convertible preferred stock, against $10.2 billion of new borrowing and $8.7billionofrepayments.Cashendedtheyearhigher(netchange+$1.1 billion).
- 2025: a profit that is not operating cash. Net earnings were $2.2 billion, but the non-cash items include a $9.7 billion gain on dispositions, which is subtracted in the operating section because the sale proceeds belong in investing. The investing section shows proceeds from dispositions of $10.6 billion. A reader who looked only at net earnings would miss that much of the profit came from selling assets.
- Non-cash charges can be large. 777X and 767 reach-forward losses added back $5.3 billion in 2025 and $4.1 billion in 2024\. They hit earnings when recorded but are not cash at that moment.
Questions to ask of any statement
This article is general information, not financial advice. Figures are as reported by the companies; sums, ratios and net securities flows are our calculations.
- Does operating cash flow track net income over several years? Look at the lines between them.
- What is in working capital? Receivables and inventory building faster than sales can signal trouble, or growth.
- Is the operating section helped by one-offs? Gains and losses on asset sales are adjusted out of operating cash flow, as Boeing's gain shows.
- What is in investing? Separate capital spending from moves in securities and acquisitions.
- Who is funding the business? In financing, compare debt, equity issuance, dividends and buybacks. Apple's financing is mostly payouts, Boeing's in 2024 was mostly capital raised.
- Do the sections reconcile to the change in cash?
- Which version are you reading? Apple's statement here is labelled condensed and unaudited, from an earnings release. Confirm figures against the 10-K before relying on them.
Sources & Regulatory Documentation
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