Dr. Paul Borosky, DBA, MBA
Business Consultant & Author
Guide 19 of 34 · The Cash Flow Statement
How to Read a Cash Flow Statement (Apple Example)
Profit is an opinion. Cash is a fact.
The income statement says Apple earned $112.0 billion in fiscal 2025. The cash flow statement shows where the real dollars went: $111.5 billion in from operations, $90.7 billion out in buybacks, and $15.4 billion out in dividends. Three sections, one bottom line, and the clearest view of any business you will ever get.
Last Updated: 10/27/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Answer
How Do You Read a Cash Flow Statement?
Textbook Definition
The statement of cash flows reports cash receipts and payments over a period, classified into operating, investing, and financing activities. The three totals add up to the change in cash on the balance sheet.
In Plain English
Read the three buckets in order. Operating: did running the business bring in cash? Investing: what did it spend on long-term assets? Financing: what moved between the company, its lenders, and its owners? Add them up and you get the change in the bank balance.
The Three Sections
Operating + Investing + Financing = Change in Cash
Apple, fiscal 2025: +$6.0B
The other two statements tell you what the company earned (income statement) and what it owns and owes (balance sheet). This one tells you whether the cash actually showed up.
One Real Company
Apple’s Cash Flow Statement, 2021 to 2025
Read the operating line first, then follow the money out. Notice the financing line: Apple sends more than $100 billion a year back to shareholders.
| Line | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Cash from operating activities | 111,482 | 118,254 | 110,543 | 122,151 | 104,038 |
| Capital expenditures | (12,715) | (9,447) | (10,959) | (10,708) | (11,085) |
| Free cash flow | 98,767 | 108,807 | 99,584 | 111,443 | 92,953 |
| Cash from investing activities | 15,195 | 2,935 | 3,705 | (22,354) | (14,545) |
| Dividends paid | (15,421) | (15,234) | (15,025) | (14,841) | (14,467) |
| Stock buybacks | (90,711) | (94,949) | (77,550) | (89,402) | (85,971) |
| Cash from financing activities | (120,686) | (121,983) | (108,488) | (110,749) | (93,353) |
| Net income, for comparison | 112,010 | 93,736 | 96,995 | 99,803 | 94,680 |
Source: Apple Form 10-K filings, fiscal 2021 to 2025, as analyzed in the book. $ millions. Parentheses mean cash going out.
The Method
How to Read It in 5 Steps
Start with operating cash.
This is the engine. Is it big, steady, and growing? Apple’s ran from $104.0 billion to $122.2 billion a year.
Compare it to net income.
Operating cash near or above net income means profits are backed by collected cash. Apple’s ran at or above net income most years and within 1% in 2025.
Read investing for capital spending.
Capex is the cost of staying in business. Apple spends only $9 billion to $13 billion a year because it outsources manufacturing.
Subtract to get free cash flow.
Operating cash minus capex. This is the money the company is truly free to use. Apple: about $99 billion in 2025.
Follow financing to see who got the cash.
Debt paid down, dividends, buybacks. Apple’s financing line shows where its free cash flow went: back to shareholders.
Why Investing Turned Positive
Apple’s investing line was positive in 2023, 2024, and 2025. That does not mean it stopped investing. Investing activities also include buying and selling marketable securities. When a company sells more securities than it buys, cash flows in. Always read the capex line by itself, not just the investing total. Capex is the number that feeds free cash flow.
Compare It
Apple vs. Microsoft: Same Engine, Different Spending
Microsoft’s operating cash flow is in the same range as Apple’s, around $120 billion and climbing. The difference is what each one does next.
| Cash flow line | Apple | Microsoft |
|---|---|---|
| Operating cash flow | $111.5B | about $120B |
| Capital spending | $12.7B, asset-light | much higher, data center build-out |
| Free cash flow | $98.8B | meaningfully lower |
| Cash return mix | mostly buybacks | more dividends, fewer buybacks |
Microsoft comparisons as described in the book. Microsoft’s fiscal year ends in June.
Two companies can bring in the same operating cash and keep very different amounts. That is why the cash flow statement has three sections, not one.
Beginner Traps
What Do Beginners Get Wrong on a Cash Flow Statement?
- Judging the company by net income and never opening this statement.
- Reading the investing total without checking the capex line inside it.
- Treating negative financing cash as a problem when it is payouts to owners.
- Forgetting that parentheses mean cash going out.
- Skipping the tie-out to the change in cash on the balance sheet.
- Reading one year when operating cash swings from year to year.
How the Book Grades Apple’s Cash Flow
From the Book
Where You Catch the Drain
The Cash Flow Statement
The Most Honest Statement
A company can report a handsome profit while its cash quietly drains away, and the cash flow statement is where you catch it.
All three statements, 26 ratios, and a final grade for Apple. The full analysis is in the book.
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Cash Flow Statement Questions
What are the three sections of a cash flow statement?
What is the most important line on a cash flow statement?
Why is cash flow from financing negative for Apple?
How is the cash flow statement different from the income statement?
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.