What is Co-Diagnostics Inc's earnings per share (EPS)?

Co-Diagnostics Inc (CODX) reported diluted earnings per share of $-35.25 for fiscal year 2025. This represents a 5.3% change compared to the previous fiscal year. EPS represents the portion of a company's net income allocated to each outstanding share of common stock and is widely used to evaluate profitability on a per-share basis.

Co-Diagnostics Inc Financials

CODX

Source SEC Filings (10-K/10-Q) Data as of Mar 31, 2026 Currency USD FYE December

This page shows Co-Diagnostics Inc (CODX) financial statements, including the income statement, balance sheet, cash flow statement, and key financial ratios. View 10 years of annual fundamentals and quarterly data, with year-over-year growth rates and compound annual growth rates (CAGR). All figures are derived from SEC filings (10-K and 10-Q reports).

Rhea AI CODX FY2025 2026-05-14

Co-Diagnostics now operates like a cash-funded R&D platform, with commercial revenue too small to absorb its expense base.

In FY2025, the business consumed -$29.1M in operating cash while generating only $622K of revenue, yet cash still ended at $11.9M because liquidity came from asset liquidation and financing, not from the core business. That matters because the balance sheet stayed lightly leveraged even as total assets fell from $63.6M in FY2024 to $24.7M, showing the company is extending runway by converting balance-sheet resources into cash rather than self-funding through sales.

R&D spending of $19.1M against revenue of just $622K makes this look development-oriented rather than commercially scaled. SG&A was lower than R&D, and operating cash flow and free cash flow both sat around -$29M, so cash burn is coming mainly from ongoing operations, not heavy capital spending.

With no long-term debt reported and a current ratio of 3.9x, solvency pressure is coming from cash burn, not lender claims. But the asset base contracted from $63.6M to $24.7M in one year, so that cushion is being consumed quickly.

Financial Health Signals

Financial health score pending refresh

We are recalculating Co-Diagnostics Inc's peer-relative financial health score against the latest fiscal year. It will appear here once the refresh completes. The signals and metrics below are current.

Altman Z-Score Distress

-9.32

Co-Diagnostics Inc scores -9.32, below the 1.81 distress threshold. The score is driven primarily by a large market capitalization ($9.6M) relative to total liabilities ($4.1M). This indicates elevated financial distress risk and warrants close attention to liquidity and debt levels.

Distress-screening estimate for non-financial companies. Not computed for banks or insurers, where the Altman model does not apply.

Piotroski F-Score Partial

1/8

Co-Diagnostics Inc passes 1 of 8 computable financial strength tests (1 of the nine could not be computed from available data). 1 of 4 profitability signals pass, no leverage/liquidity signals pass (rising debt, declining liquidity, or share dilution), neither operating efficiency signal passes.

Earnings Quality Low Quality

0.62x

For every $1 of reported earnings, Co-Diagnostics Inc generates $0.62 in operating cash flow (-$29.1M OCF vs -$46.9M net income). This low ratio suggests earnings are primarily driven by accounting accruals rather than cash generation, which may not be sustainable.

Key Financial Metrics

Export CSV

Earnings & Revenue

Revenue

$622K

YoY-84.1%

5Y CAGR-61.6%

Co-Diagnostics Inc generated $622K in revenue in fiscal year 2025. This represents a decrease of 84.1% from the prior year.

EBITDA

-$49.1M

YoY-26.8%

Co-Diagnostics Inc's EBITDA was -$49.1M in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization. This represents a decrease of 26.8% from the prior year.

Net Income

-$46.9M

YoY-24.6%

Co-Diagnostics Inc reported -$46.9M in net income in fiscal year 2025. This represents a decrease of 24.6% from the prior year.

EPS (Diluted)

$-35.25

YoY+5.3%

Co-Diagnostics Inc earned $-35.25 per diluted share (EPS) in fiscal year 2025. This represents an increase of 5.3% from the prior year.

Cash & Balance Sheet

Free Cash Flow

-$29.8M

YoY+0.2%

Co-Diagnostics Inc generated -$29.8M in free cash flow in fiscal year 2025, representing cash available after capex. This represents an increase of 0.2% from the prior year.

Cash & Debt

$11.9M

YoY+304.7%

5Y CAGR-22.7%

Co-Diagnostics Inc held $11.9M in cash against $0 in long-term debt as of fiscal year 2025.

Dividends Per Share

N/A

Shares Outstanding

YoY+90.1%

Co-Diagnostics Inc had 2M shares outstanding in fiscal year 2025. This represents an increase of 90.1% from the prior year.

Margins & Returns

Gross Margin

64.3%

YoY-10.2pp

5Y CAGR-13.5pp

Co-Diagnostics Inc's gross margin was 64.3% in fiscal year 2025, indicating the percentage of revenue retained after direct costs. This is down 10.2 percentage points from the prior year.

Operating Margin

-8058.8%

YoY-7035.1pp

5Y CAGR-8114.8pp

Co-Diagnostics Inc's operating margin was -8058.8% in fiscal year 2025, reflecting core business profitability. This is down 7035.1 percentage points from the prior year.

Net Margin

-7533.6%

YoY-6572.3pp

5Y CAGR-7590.6pp

Co-Diagnostics Inc's net profit margin was -7533.6% in fiscal year 2025, showing the share of revenue converted to profit. This is down 6572.3 percentage points from the prior year.

Return on Equity

-227.3%

YoY-157.5pp

5Y CAGR-291.0pp

Co-Diagnostics Inc's ROE was -227.3% in fiscal year 2025, measuring profit generated per dollar of shareholder equity. This is down 157.5 percentage points from the prior year.

Capital Allocation

R&D Spending

$19.1M

YoY-8.8%

5Y CAGR+43.1%

Co-Diagnostics Inc invested $19.1M in research and development in fiscal year 2025. This represents a decrease of 8.8% from the prior year.

Share Buybacks

N/A

Capital Expenditures

$700K

YoY-6.5%

5Y CAGR-2.0%

Co-Diagnostics Inc invested $700K in capex in fiscal year 2025, funding long-term assets and infrastructure. This represents a decrease of 6.5% from the prior year.

CODX Income Statement

Metric	FY25	FY24	FY23	FY22	FY21	FY20
Revenue	$622K-84.1%	$3.9M-42.5%	$6.8M-80.1%	$34.2M-65.0%	$97.9M+31.3%	$74.6M
Cost of Revenue	$222K-77.7%	$999K-76.1%	$4.2M-23.6%	$5.5M-52.6%	$11.6M-30.2%	$16.6M
Gross Profit	$400K-86.3%	$2.9M+11.0%	$2.6M-90.9%	$28.7M-66.7%	$86.3M+48.9%	$58.0M
R&D Expenses	$19.1M-8.8%	$21.0M-8.6%	$23.0M+31.7%	$17.4M+16.5%	$15.0M+369.7%	$3.2M
SG&A Expenses	$9.1M-43.9%	$16.2M+13.1%	$14.3M+0.1%	$14.3M+23.5%	$11.6M+39.5%	$8.3M
Operating Income	-$50.2M-25.2%	-$40.1M+6.1%	-$42.7M-58.3%	-$27.0M-158.6%	$46.1M+10.5%	$41.7M
Interest Expense	N/A	N/A	N/A	N/A	N/A	N/A
Income Tax	-$1.6M-2916.9%	$57K+102.1%	-$2.8M+39.7%	-$4.6M-151.3%	$9.0M+9815.6%	$91K
Net Income	-$46.9M-24.6%	-$37.6M-6.5%	-$35.3M-148.2%	-$14.2M-138.8%	$36.7M-13.7%	$42.5M
EPS (Diluted)	$-35.25+5.3%	$-37.22	$-1.20-166.7%	$-0.45-136.6%	$1.23-19.1%	$1.52

Metric	Q1'26	Q4'25	Q3'25	Q2'25	Q1'25	Q4'24	Q3'24	Q2'24
Revenue	$146K-44.7%	$264K+81.5%	$145K-10.8%	$163K+224.0%	$50K-66.3%	$149K-76.7%	$641K-75.9%	$2.7M
Cost of Revenue	$194K+36.1%	$142K+441.7%	$26K-18.1%	$32K+48.7%	$22K-91.5%	$255K-14.2%	$297K+40.2%	$212K
Gross Profit	-$48K-139.3%	$122K+2.0%	$119K-9.0%	$131K+356.0%	$29K+127.1%	-$106K-130.8%	$344K-85.9%	$2.4M
R&D Expenses	$5.9M+16.4%	$5.1M+13.8%	$4.5M-4.4%	$4.7M-3.7%	$4.9M+1.3%	$4.8M-1.5%	$4.9M-13.0%	$5.6M
SG&A Expenses	$2.5M+33.9%	$1.9M+2.9%	$1.8M-30.2%	$2.6M-6.2%	$2.8M-52.3%	$5.8M+35.7%	$4.3M+36.9%	$3.1M
Operating Income	-$9.2M+65.3%	-$26.5M-278.4%	-$7.0M+13.0%	-$8.1M+5.8%	-$8.6M+28.2%	-$11.9M-16.3%	-$10.2M-33.3%	-$7.7M
Interest Expense	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Income Tax	$520+100.1%	-$474K+59.4%	-$1.2M-9563.7%	$12K+2.7%	$12K+246.8%	-$8K-136.8%	$22K+7.8%	$21K
Net Income	-$9.1M+64.5%	-$25.7M-337.3%	-$5.9M+23.8%	-$7.7M-2.6%	-$7.5M+31.7%	-$11.0M-13.8%	-$9.7M-27.6%	-$7.6M
EPS (Diluted)	$-4.06	N/A	$-0.16+30.4%	$-0.23+96.7%	$-7.05	N/A	$-0.32-28.0%	$-0.25

CODX Balance Sheet

Metric	FY25	FY24	FY23	FY22	FY21	FY20
Total Assets	$24.7M-61.1%	$63.6M-33.3%	$95.3M-22.6%	$123.1M-23.1%	$160.0M+124.6%	$71.2M
Current Assets	$13.7M-57.6%	$32.3M-48.0%	$62.1M-33.0%	$92.7M-19.4%	$115.1M+69.8%	$67.8M
Cash & Equivalents	$11.9M+304.7%	$2.9M-80.3%	$14.9M-35.1%	$23.0M-74.1%	$88.6M+106.2%	$43.0M
Inventory	$992K-7.5%	$1.1M-35.6%	$1.7M-68.7%	$5.3M+165.0%	$2.0M-74.9%	$8.0M
Accounts Receivable	$190K+43.6%	$133K-56.4%	$304K-91.2%	$3.5M-83.4%	$20.8M+71.7%	$12.1M
Goodwill	N/A	N/A	N/A	N/A	$14.7M	N/A
Total Liabilities	$4.1M-57.5%	$9.7M+4.1%	$9.3M+8.6%	$8.6M-66.5%	$25.6M+462.9%	$4.5M
Current Liabilities	$3.5M-51.6%	$7.3M+27.3%	$5.7M+48.4%	$3.9M-69.3%	$12.6M+210.1%	$4.1M
Long-Term Debt	N/A	N/A	N/A	N/A	N/A	N/A
Total Equity	$20.6M-61.7%	$53.9M-37.0%	$85.6M-25.3%	$114.5M-14.8%	$134.5M+101.6%	$66.7M
Retained Earnings	-$80.4M-140.1%	-$33.5M-828.1%	$4.6M-88.5%	$39.9M-26.3%	$54.2M+209.3%	$17.5M

Metric	Q1'26	Q4'25	Q3'25	Q2'25	Q1'25	Q4'24	Q3'24	Q2'24
Total Assets	$21.5M-13.1%	$24.7M-44.7%	$44.7M-3.7%	$46.5M-15.7%	$55.1M-13.2%	$63.6M-12.2%	$72.4M-10.3%	$80.7M
Current Assets	$9.8M-28.6%	$13.7M-2.6%	$14.1M-8.2%	$15.3M-35.8%	$23.8M-26.2%	$32.3M-19.5%	$40.1M-16.8%	$48.2M
Cash & Equivalents	$8.2M-30.7%	$11.9M+3.9%	$11.4M+3.0%	$11.1M+484.1%	$1.9M-35.2%	$2.9M-72.8%	$10.8M-22.1%	$13.9M
Inventory	$846K-14.7%	$992K-9.0%	$1.1M+0.5%	$1.1M+0.1%	$1.1M+1.0%	$1.1M-15.3%	$1.3M-13.5%	$1.5M
Accounts Receivable	$82K-56.7%	$190K+240.5%	$56K-73.5%	$211K+54.7%	$136K+2.9%	$133K-25.6%	$178K-67.7%	$552K
Goodwill	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Total Liabilities	$5.5M+32.7%	$4.1M-16.3%	$4.9M-7.8%	$5.3M-26.3%	$7.2M-25.4%	$9.7M+12.7%	$8.6M+3.5%	$8.3M
Current Liabilities	$4.3M+21.0%	$3.5M-4.1%	$3.7M-0.5%	$3.7M-31.0%	$5.4M-26.5%	$7.3M+26.2%	$5.8M+9.3%	$5.3M
Long-Term Debt	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Total Equity	$16.0M-22.2%	$20.6M-48.2%	$39.8M-3.2%	$41.1M-13.4%	$47.5M-11.9%	$53.9M-15.5%	$63.8M-11.9%	$72.4M
Retained Earnings	-$89.5M-11.4%	-$80.4M-48.3%	-$54.2M-12.2%	-$48.3M-19.1%	-$40.6M-21.2%	-$33.5M-52.1%	-$22.0M-78.7%	-$12.3M

CODX Cash Flow Statement

Metric	FY25	FY24	FY23	FY22	FY21	FY20
Operating Cash Flow	-$29.1M+0.1%	-$29.2M-32.0%	-$22.1M-436.2%	$6.6M-84.0%	$41.1M+45.9%	$28.2M
Capital Expenditures	$700K-6.5%	$748K-45.2%	$1.4M-4.4%	$1.4M+113.2%	$669K-13.6%	$774K
Free Cash Flow	-$29.8M+0.2%	-$29.9M-27.5%	-$23.4M-556.1%	$5.1M-87.3%	$40.4M+47.5%	$27.4M
Investing Cash Flow	$26.3M+53.9%	$17.1M+10.9%	$15.4M+126.5%	-$58.2M-1519.2%	$4.1M+170.4%	-$5.8M
Financing Cash Flow	$11.8M+11266.7%	$104K+107.6%	-$1.4M+90.3%	-$14.0M-3215.9%	$450K-97.7%	$19.7M
Dividends Paid	N/A	N/A	N/A	N/A	N/A	N/A
Share Buybacks	N/A	N/A	$1.4M-90.4%	$14.2M	N/A	N/A

Metric	Q1'26	Q4'25	Q3'25	Q2'25	Q1'25	Q4'24	Q3'24	Q2'24
Operating Cash Flow	-$7.8M-26.6%	-$6.2M-5.0%	-$5.9M+28.8%	-$8.3M+5.2%	-$8.7M-6.2%	-$8.2M-13.9%	-$7.2M-38.9%	-$5.2M
Capital Expenditures	$142K+7.6%	$132K+75.7%	$75K-81.3%	$401K+336.3%	$92K+25.9%	$73K-58.2%	$174K+76.9%	$99K
Free Cash Flow	-$8.0M-26.2%	-$6.3M-5.9%	-$6.0M+31.2%	-$8.7M+1.7%	-$8.8M-6.4%	-$8.3M-12.2%	-$7.4M-39.6%	-$5.3M
Investing Cash Flow	-$142K+56.9%	-$329K-115.1%	$2.2M-87.3%	$17.1M+132.0%	$7.4M+2665.7%	$266K-93.6%	$4.2M+203.3%	-$4.0M
Financing Cash Flow	$4.3M-37.8%	$7.0M+71.7%	$4.1M+846.0%	$429K+20.9%	$355K	N/A	N/A	N/A
Dividends Paid	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Share Buybacks	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A

CODX Financial Ratios

Metric	FY25	FY24	FY23	FY22	FY21	FY20
Gross Margin	64.3%-10.2pp	74.5%+35.9pp	38.6%-45.4pp	84.0%-4.2pp	88.2%+10.4pp	77.8%
Operating Margin	-8058.8%-7035.1pp	-1023.8%-396.8pp	-626.9%-548.1pp	-78.8%-125.9pp	47.1%-8.9pp	55.9%
Net Margin	-7533.6%-6572.3pp	-961.4%-442.7pp	-518.7%-477.1pp	-41.6%-79.1pp	37.5%-19.5pp	57.0%
Return on Equity	-227.3%-157.5pp	-69.9%-28.6pp	-41.3%-28.9pp	-12.4%-39.7pp	27.3%-36.4pp	63.7%
Return on Assets	-189.5%-130.3pp	-59.2%-22.1pp	-37.1%-25.5pp	-11.6%-34.5pp	22.9%-36.7pp	59.6%
Current Ratio	3.87-0.5	4.41-6.4	10.81-13.1	23.94+14.8	9.14-7.6	16.69
Debt-to-Equity	0.20+0.0	0.18+0.1	0.11+0.0	0.07-0.1	0.19+0.1	0.07
FCF Margin	-4793.2%-4029.4pp	-763.8%-419.6pp	-344.2%-359.2pp	15.0%-26.3pp	41.3%+4.5pp	36.7%

Metric	Q1'26	Q4'25	Q3'25	Q2'25	Q1'25	Q4'24	Q3'24	Q2'24
Gross Margin	-32.8%-78.8pp	46.1%-35.9pp	81.9%+1.6pp	80.3%+23.2pp	57.1%+127.9pp	-70.8%-124.4pp	53.6%-38.4pp	92.0%
Operating Margin	-6309.1%+3747.6pp	-10056.7%-5232.2pp	-4824.5%+121.6pp	-4946.1%+12063.5pp	-17009.7%-9035.8pp	-7973.9%-6377.5pp	-1596.4%-1307.3pp	-289.1%
Net Margin	-6262.3%+3492.8pp	-9755.0%-5705.8pp	-4049.3%+695.8pp	-4745.0%+10238.5pp	-14983.5%-7596.2pp	-7387.4%-5875.0pp	-1512.4%-1226.3pp	-286.0%
Return on Equity	-57.0%+67.8pp	-124.8%-110.0pp	-14.8%+4.0pp	-18.8%-2.9pp	-15.9%+4.6pp	-20.5%-5.3pp	-15.2%-4.7pp	-10.5%
Return on Assets	-42.5%+61.5pp	-104.0%-90.9pp	-13.2%+3.5pp	-16.6%-3.0pp	-13.7%+3.7pp	-17.3%-3.9pp	-13.4%-4.0pp	-9.4%
Current Ratio	2.28-1.6	3.87+0.1	3.81-0.3	4.12-0.3	4.43+0.0	4.41-2.5	6.92-2.2	9.09
Debt-to-Equity	0.34+0.1	0.20+0.1	0.120.0	0.13-0.0	0.15-0.0	0.18+0.0	0.13+0.0	0.11
FCF Margin	-5473.2%-3074.2pp	-2398.9%+1714.2pp	-4113.1%+1220.4pp	-5333.6%+12243.3pp	-17576.9%-12015.9pp	-5561.0%-4406.2pp	-1154.8%-955.2pp	-199.6%

Similar Companies

Intelligent Bio Solutions Inc INBS

$5.5M

Sintx Technologies Inc SINT

$9.9M

Beyond Air Inc XAIR

$5.4M

Ainos Inc AIMD

$14.0M

Nexalin Tech NXL

$8.7M

Frequently Asked Questions

What is Co-Diagnostics Inc's annual revenue?

Co-Diagnostics Inc (CODX) reported $622K in total revenue for fiscal year 2025. This represents a -84.1% change compared to the previous fiscal year. Revenue measures the total income earned from the company's primary business operations before any expenses are deducted.

How fast is Co-Diagnostics Inc's revenue growing?

Co-Diagnostics Inc (CODX) revenue declined by 84.1% year-over-year, from $3.9M to $622K in fiscal year 2025.

Is Co-Diagnostics Inc profitable?

No, Co-Diagnostics Inc (CODX) reported a net income of -$46.9M in fiscal year 2025, with a net profit margin of -7533.6%.

What is Co-Diagnostics Inc's EBITDA?

Co-Diagnostics Inc (CODX) had EBITDA of -$49.1M in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization.

What is Co-Diagnostics Inc's gross margin?

Co-Diagnostics Inc (CODX) had a gross margin of 64.3% in fiscal year 2025, indicating the percentage of revenue retained after direct costs of goods sold.

What is Co-Diagnostics Inc's operating margin?

Co-Diagnostics Inc (CODX) had an operating margin of -8058.8% in fiscal year 2025, reflecting the profitability of core business operations before interest and taxes.

What is Co-Diagnostics Inc's net profit margin?

Co-Diagnostics Inc (CODX) had a net profit margin of -7533.6% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.

What is Co-Diagnostics Inc's return on equity (ROE)?

Co-Diagnostics Inc (CODX) has a return on equity of -227.3% for fiscal year 2025, measuring how efficiently the company generates profit from shareholder equity.

What is Co-Diagnostics Inc's free cash flow?

Co-Diagnostics Inc (CODX) generated -$29.8M in free cash flow during fiscal year 2025. This represents a 0.2% change compared to the previous fiscal year. Free cash flow represents the cash a company generates after accounting for capital expenditures, and is widely used to assess financial flexibility and shareholder value.

What is Co-Diagnostics Inc's operating cash flow?

Co-Diagnostics Inc (CODX) generated -$29.1M in operating cash flow during fiscal year 2025, representing cash generated from core business activities.

What are Co-Diagnostics Inc's total assets?

Co-Diagnostics Inc (CODX) had $24.7M in total assets as of fiscal year 2025, including both current and long-term assets.

What are Co-Diagnostics Inc's capital expenditures?

Co-Diagnostics Inc (CODX) invested $700K in capital expenditures during fiscal year 2025, funding long-term assets and infrastructure.

How much does Co-Diagnostics Inc spend on research and development?

Co-Diagnostics Inc (CODX) invested $19.1M in research and development during fiscal year 2025.

How many shares does Co-Diagnostics Inc have outstanding?

Co-Diagnostics Inc (CODX) had 2M shares outstanding as of fiscal year 2025.

What is Co-Diagnostics Inc's current ratio?

Co-Diagnostics Inc (CODX) had a current ratio of 3.87 as of fiscal year 2025, which is generally considered healthy.

What is Co-Diagnostics Inc's debt-to-equity ratio?

Co-Diagnostics Inc (CODX) had a debt-to-equity ratio of 0.20 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.

What is Co-Diagnostics Inc's return on assets (ROA)?

Co-Diagnostics Inc (CODX) had a return on assets of -189.5% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.

What is Co-Diagnostics Inc's cash runway?

Based on fiscal year 2025 data, Co-Diagnostics Inc (CODX) had $11.9M in cash against an annual operating cash burn of $29.1M. This gives an estimated cash runway of approximately 5 months at the current burn rate. Cash runway measures how long a company can continue operating before running out of cash, assuming no additional funding.

What is Co-Diagnostics Inc's Altman Z-Score?

Co-Diagnostics Inc (CODX) has an Altman Z-Score of -9.32, placing it in the Distress Zone (elevated bankruptcy risk). The Z-Score combines five financial ratios (working capital, retained earnings, EBIT, market capitalization, and revenue relative to total assets) to predict the likelihood of bankruptcy. Scores above 2.99 indicate financial safety while scores below 1.81 suggest financial distress. Learn more in our complete guide to financial health indicators.

What is Co-Diagnostics Inc's Piotroski F-Score?

Co-Diagnostics Inc (CODX) has a Piotroski F-Score of 1 out of 8 computable signals; 1 of the nine could not be computed from available data, so the full-scale strength rating is not shown. The F-Score evaluates nine binary signals across profitability (positive ROA, positive cash flow, improving ROA, earnings quality), leverage (decreasing debt, improving liquidity, no share dilution), and operating efficiency (improving gross margin, improving asset turnover). Scores of 7 to 9 indicate strong and improving fundamentals. Learn more in our complete guide to financial health indicators.

Are Co-Diagnostics Inc's earnings high quality?

Co-Diagnostics Inc (CODX) has an earnings quality ratio of 0.62x, considered low quality (accrual-driven). This ratio compares operating cash flow to net income. A ratio above 1.0x means the company generates more cash than its reported earnings, indicating sustainable, cash-backed profits. Ratios below 1.0x suggest earnings rely on accounting accruals rather than actual cash generation. Learn more in our complete guide to financial health indicators.