Dr. Paul Borosky, DBA, MBA
Business Consultant & Author
Guide 20 of 34 · The Cash Flow Statement
What Is Cash Flow from Operating Activities?
Does running the business actually bring in cash?
That one question matters more than any profit figure. Cash from operating activities answers it. Apple’s ran between $104.0 billion and $122.2 billion a year from 2021 to 2025. This guide explains what goes into the number, how it connects to net income, and how to judge whether profits are backed by real money.
Last Updated: 10/27/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Answer
What Is Cash Flow from Operating Activities?
Textbook Definition
Cash flow from operating activities is the cash generated by a company’s core business during a period. Under the indirect method it starts with net income, adds back non-cash expenses, and adjusts for changes in working capital.
In Plain English
It is the cash the business throws off from doing its normal work, before it buys equipment or pays its owners. If this number is big and steady, the business pays its own way.
Operating Cash Flow (Indirect Method)
Net Income + Non-Cash Expenses ± Changes in Working Capital
Apple, fiscal 2025: $111.5B
Non-cash expenses are costs on the income statement that did not use cash this year. Depreciation is the big one. Working capital changes capture timing: customers who have not paid yet, inventory bought, bills not yet paid.
One Real Company
Apple’s Operating Cash Flow vs. Net Income, 2021 to 2025
Operating cash beat net income in four of five years. In 2025 the two were almost identical. Either way, Apple’s profits are backed by collected cash.
| Line | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Cash from operating activities | 111,482 | 118,254 | 110,543 | 122,151 | 104,038 |
| Net income | 112,010 | 93,736 | 96,995 | 99,803 | 94,680 |
| Depreciation (income statement) | 11,698 | 11,445 | 11,419 | 11,104 | 11,284 |
| Operating cash ÷ net income | 1.00 | 1.26 | 1.14 | 1.22 | 1.10 |
Source: Apple Form 10-K filings, fiscal 2021 to 2025, as analyzed in the book. $ millions. The last row is calculated from the lines above.
The Method
How to Judge Operating Cash Flow in 5 Steps
Find the first total on the cash flow statement.
It is the subtotal at the bottom of the operating section, usually labeled cash generated by operating activities.
Divide it by net income.
At or above 1.0 means profit is landing as cash. Well below 1.0 year after year is a yellow flag worth digging into.
Read five years for the trend.
Apple’s swung from $122.2 billion in 2022 down to $110.5 billion in 2023 and back up. Swings are normal. A steady slide is not.
Look at what drives the gap.
Depreciation pushes cash above profit. Growing receivables and inventory pull it below. The working capital lines tell you which.
Subtract capex next.
Operating cash is what the engine makes. Free cash flow is what is left after reinvesting. That is the next number to check.
Profit Down, Cash Up
In 2024 Apple’s net income fell to $93.7 billion, dragged down in part by a one-time European tax charge. Operating cash that same year was $118.3 billion, the second-highest of the five years. Profit and cash moved in opposite directions. When that happens, do not pick one. Read both, find the cause, and ask whether it repeats.
Compare It
Apple vs. Microsoft: Two Cash Machines
Both companies sit in rare territory. Microsoft’s operating cash flow runs on the order of $120 billion and is climbing. Apple’s ended fiscal 2025 at $111.5 billion.
| Latest fiscal year | Apple | Microsoft |
|---|---|---|
| Operating cash flow | $111.5B | about $120B |
| Net income | $112B | $102B |
| Where the difference shows up | low capex, big buybacks | heavy capex for data centers |
Microsoft comparisons as described in the book. Microsoft’s fiscal year ends in June.
The real split between them is not the cash they make. It is what they do with it. That shows up after capex, in free cash flow.
Beginner Traps
What Do Beginners Get Wrong About Operating Cash Flow?
- Assuming net income and operating cash should match every year.
- Forgetting depreciation is added back because it used no cash this year.
- Ignoring rising receivables that drain cash while profit looks fine.
- Calling one weak year a trend.
- Stopping at operating cash without subtracting capex.
- Mixing operating cash with the investing or financing totals.
How the Book Grades Apple’s Cash Engine
From the Book
The Most Important Question About Any Business
Cash Flow Statement · Operating Activities
The Cash-Earning Engine
In plain terms, it answers the most important question about any business: does actually running it generate cash?
Operating cash, capex, free cash flow, and payouts, all graded on Apple. The full chapter is in the book.
Get the Book on Amazon →Running Your Own Shop?
Slow-paying customers are the fastest way to make operating cash lag profit. See how to get customers to pay on time. If profit looks good and the bank does not, Dr. Paul works with owners as a part-time financial lead. See fractional CFO services.
Beyond the Book
Put These Numbers to Work on Your Own Business
The book teaches you to read the numbers. These three take you from reading them to using them.
Business Plan Templates
Start with a proven plan. A Word business plan and an Excel financial model built for your industry.
See the Templates →Business Plan Writing
Need a plan a lender will read? Dr. Paul writes it, financials included.
See Plan Writing →Business Consulting
You can read the numbers. Now fix them, one-on-one with Dr. Paul.
See Consulting Options →FAQ
Operating Cash Flow Questions
What is included in cash flow from operating activities?
Why is operating cash flow different from net income?
Is higher operating cash flow than net income good?
Keep Going
Related Guides
See all three sections in the cash flow statement guide.
Written by Dr. Paul Borosky, DBA, MBA, business consultant, author, and adjunct finance instructor with an MBA focused in finance.
This page is for general educational purposes only. It is not investment, financial, tax, accounting, or legal advice, and nothing here is a recommendation to buy or sell any security. Apple and Microsoft figures come from their public filings as analyzed in the book. Apple and Microsoft are trademarks of their respective owners, and this page is not affiliated with or endorsed by either company.