What is FREDDIE MAC VAR RT PFD's earnings per share (EPS)?

FREDDIE MAC VAR RT PFD (FMCCJ) reported diluted earnings per share of -$0.02 for fiscal year 2025. 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.

FREDDIE MAC VAR RT PFD (FMCCJ) Financials

FMCCJ

FY2025 annual

Revenue $23.3B -2.7% YoY

Net Income $10.7B -9.5% YoY

EPS (Diluted) -$0.02 YoY not available

Operating Cash Flow $19.4B +192.3% YoY

Source SEC Filings (10-K/10-Q) Latest period Q2 FY2026, ended Jun 30, 2026 Reported Jul 30, 2026 Currency USD FYE December

Newest figures come from the 10-Q for Q2 FY2026, filed Jul 30, 2026. Each column of the statement tables below links to the filing it was taken from, and every filing is listed on the FMCCJ SEC filings page.

FREDDIE MAC VAR RT PFD (FMCCJ) reported $23.3B in revenue for fiscal year 2025, down 2.7% from the prior fiscal year. This page shows its income statement, balance sheet, cash flow statement, and key financial ratios. View 15 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 FMCCJ FY2025 2026-08-30

Balance-sheet leverage and a thin equity cushion dominate how this institution converts a huge asset base into earnings.

In FY2025, $10.7B of net income became $19.4B of operating cash flow, so cash conversion exceeded accounting profit rather than merely matching it. Net margin remained 46.1% while ROA was just 0.3%, revealing that headline profitability is generated on an exceptionally large asset base.

The balance sheet carried $3.5T of assets against $3.4T of liabilities in FY2025. With only $70.4B of equity, the structure reflects capital thin relative to assets despite a profitable period.

The reported debt-to-equity ratio fell from 106.3x in FY2021 to 2.4x in FY2025. Yet total liabilities rose from $3.0T to $3.4T, so the improvement reflects the debt-to-equity relationship—not a shrinking liability base.

Financial Health Signals

Financial health score not available

FREDDIE MAC VAR RT PFD does not currently provide enough eligible data for a peer-relative financial health score, so none is published. The signals and metrics below are current.

Piotroski F-Score Partial

5/7

FREDDIE MAC VAR RT PFD passes 5 of 7 computable financial strength tests (2 of the nine could not be computed from available data). 3 of 4 profitability signals pass, all 2 leverage/liquidity signals pass, neither operating efficiency signal passes.

Earnings Quality Cash-Backed

1.81x

For every $1 of reported earnings, FREDDIE MAC VAR RT PFD generates $1.81 in operating cash flow ($19.4B OCF vs $10.7B net income). This indicates profits are well-supported by actual cash generation, not accounting adjustments.

Key Financial Metrics

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Earnings & Revenue

Revenue

$6.0B

YoY+1.3%

FREDDIE MAC VAR RT PFD generated $6.0B in revenue in Q2 2026. This represents an increase of 1.3% from the same quarter a year earlier.

Net Income

$3.8B

YoY+60.8%

FREDDIE MAC VAR RT PFD reported $3.8B in net income in Q2 2026. This represents an increase of 60.8% from the same quarter a year earlier.

EPS (Diluted)

$0.00

YoY+100.0%

FREDDIE MAC VAR RT PFD earned $0.00 per diluted share (EPS) in Q2 2026. This represents an increase of 100.0% from the same quarter a year earlier.

EBITDA

Not reported for Q2 2026.

Cash & Balance Sheet

Cash & Debt

$4.3B

YoY+1.3%

QoQ-18.9%

FREDDIE MAC VAR RT PFD held $4.3B in cash against $163.7B in long-term debt as of Q2 2026.

Shares Outstanding

650M

YoY0.0%

QoQ0.0%

5Y CAGR0.0%

10Y CAGR0.0%

FREDDIE MAC VAR RT PFD had 650M shares outstanding in Q2 2026. That is unchanged from the same quarter a year earlier. It is unchanged from the prior quarter.

Free Cash Flow

Not reported for Q2 2026.

Dividends Per Share

Not reported for Q2 2026.

Margins & Returns

Net Margin

64.1%

YoY+23.7pp

FREDDIE MAC VAR RT PFD's net profit margin was 64.1% in Q2 2026, showing the share of revenue converted to profit. This is up 23.7 percentage points from the same quarter a year earlier.

Return on Equity

4.9%

YoY+1.3pp

FREDDIE MAC VAR RT PFD's ROE was 4.9% in Q2 2026, measuring profit generated per dollar of shareholder equity. This is up 1.3 percentage points from the same quarter a year earlier.

Gross Margin

Not reported for Q2 2026.

Operating Margin

Not reported for Q2 2026.

Capital Allocation

None of these metrics is reported for Q2 2026.

FMCCJ Income Statement

Figures in USD, abbreviated K (thousand), M (million), B (billion), T (trillion). Negative values carry a minus sign and red type. Each change compares the year with the year before it, and each quarter with the same quarter a year earlier.

FMCCJ quarterly income statement

Metric	FY2510-K	FY2410-K	FY2310-K	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K	FY1410-K	FY1310-K	FY1210-K	FY1110-K
Revenue	$23.3B-2.7%	$23.9B+12.6%	$21.2B-0.2%	$21.3B-3.1%	$22.0B+31.8%	$16.7B+18.3%	$14.1B-9.6%	$15.6B-26.1%	$21.1B+41.5%	$14.9B+31.1%	$11.3B-19.8%	$14.2B-43.4%	$25.0B+84.7%	$13.5B+79.9%	$7.5B
SG&A Expenses	$2.9B+1.5%	$2.8B+1.7%	$2.8B+85.2%	$1.5B-43.1%	$2.7B+4.6%	$2.5B-1.1%	$2.6B+11.8%	$2.3B+8.9%	$2.1B+5.0%	$2.0B+4.0%	$1.9B+2.4%	$1.9B+4.2%	$1.8B+15.6%	$1.6B+3.7%	$1.5B
Interest Expense	$108.4B+10.5%	$98.1B+13.0%	$86.8B+32.6%	$65.5B+48.9%	$43.9B-11.3%	$49.6B-18.8%	$61.0B+5.2%	$58.0B+8.2%	$53.6B+5.6%	$50.8B-2.6%	$52.1B-5.0%	$54.9B-1.5%	$55.8B-16.1%	$66.5B-16.9%	$80.0B
Income Tax	$2.6B-9.9%	$2.9B+9.7%	$2.7B+16.9%	$2.3B-26.3%	$3.1B+62.4%	$1.9B+3.7%	$1.8B-18.0%	$2.2B-80.0%	$11.2B+193.1%	$3.8B+32.0%	$2.9B-12.5%	$3.3B+114.2%	-$23.3B-1416.3%	-$1.5B-284.3%	-$400.0M
Net Income	$10.7B-9.5%	$11.9B+12.5%	$10.5B+13.0%	$9.3B-23.0%	$12.1B+65.3%	$7.3B+1.6%	$7.2B-21.9%	$9.2B+64.2%	$5.6B-28.0%	$7.8B+22.6%	$6.4B-17.1%	$7.7B-84.2%	$48.7B+343.2%	$11.0B+308.5%	-$5.3B
EPS (Basic)	-$0.02	$0.00+100.0%	-$0.05-145.5%	$0.11-26.7%	$0.15+1400.0%	$0.01+105.6%	-$0.18	N/A	N/A	N/A	N/A	N/A	N/A	N/A	-$3.63
EPS (Diluted)	-$0.02	$0.00+100.0%	-$0.05-145.5%	$0.11-26.7%	$0.15	$0.01+105.6%	-$0.18	N/A	N/A	N/A	N/A	N/A	N/A	N/A	-$3.63
Diluted Shares (Avg)	3.23B0.0%	3.23B0.0%	3.23B0.0%	3.23B0.0%	3.23B	3.23B0.0%	3.23B	N/A	N/A	N/A	N/A	N/A	N/A	N/A	3.24B

Metric	Q2'2610-Q	Q4'2510-Q	Q3'2510-Q	Q2'2510-Q	Q1'2510-Q	Q4'2410-K	Q3'2410-Q	Q2'2410-Q
Revenue	$6.0B+1.3%	N/A	$5.7B-1.7%	$5.9B-1.2%	N/A	$6.3B+17.8%	$5.8B+2.6%	$6.0B+12.2%
SG&A Expenses	$676.0M-9.6%	N/A	$716.0M+0.4%	$748.0M+8.6%	N/A	$749.0M-53.1%	$713.0M+70.6%	$689.0M+70.1%
Interest Expense	$28.3B+5.7%	N/A	$27.5B+10.9%	$26.7B+10.8%	N/A	$25.6B+10.9%	$24.8B+12.5%	$24.1B+13.7%
Income Tax	$936.0M+59.2%	N/A	$675.0M-8.9%	$588.0M-15.4%	N/A	$796.0M+8.2%	$741.0M+7.1%	$695.0M-4.5%
Net Income	$3.8B+60.8%	N/A	$2.8B-10.7%	$2.4B-13.7%	N/A	$3.2B+10.6%	$3.1B+15.6%	$2.8B-6.1%
EPS (Basic)	$0.00+100.0%	$0.00-100.0%	$0.00+100.0%	-$0.01	N/A	$0.01+125.0%	-$0.02-100.0%	$0.00-100.0%
EPS (Diluted)	$0.00+100.0%	$0.00-100.0%	$0.00+100.0%	-$0.01	N/A	$0.01+125.0%	-$0.02-100.0%	$0.00-100.0%
Diluted Shares (Avg)	3.23B0.0%	N/A	3.23B0.0%	3.23B0.0%	N/A	N/A	3.23B0.0%	3.23B0.0%

Not reported in any period shown, so not listed: Cost of Revenue, Gross Profit, R&D Expenses, Operating Income, EBITDA.

FMCCJ Balance Sheet

FMCCJ quarterly balance sheet

Metric	FY2510-K	FY2410-K	FY2310-K	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K	FY1410-K	FY1310-K	FY1210-K	FY1110-K
Total Assets	$3.5T+3.3%	$3.4T+3.2%	$3.3T+2.3%	$3.2T+6.0%	$3.0T+15.2%	$2.6T+19.8%	$2.2T+6.3%	$2.1T+0.6%	$2.0T+1.3%	$2.0T+1.9%	$2.0T+2.1%	$1.9T-1.0%	$2.0T-1.2%	$2.0T-7.3%	$2.1T
Cash & Equivalents	$5.3B-3.7%	$5.5B-8.1%	$6.0B-5.4%	$6.4B-37.3%	$10.2B-57.5%	$23.9B+360.4%	$5.2B-28.7%	$7.3B-25.9%	$9.8B-20.7%	$12.4B+121.1%	$5.6B-48.8%	$10.9B-3.1%	$11.3B+32.5%	$8.5B-70.1%	$28.4B
Short-Term Investments	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0
Accounts Receivable	N/A	N/A	N/A	N/A	N/A	N/A	$10.8B+340.5%	$2.4B-64.7%	$6.9B+36.2%	$5.1B+40.2%	$3.6B-7.0%	$3.9B-10.7%	$4.4B-56.7%	$10.1B+20.9%	$8.3B
Long-Term Investments	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0
Total Liabilities	$3.4T+3.0%	$3.3T+2.9%	$3.2T+2.0%	$3.2T+5.8%	$3.0T+14.8%	$2.6T+19.5%	$2.2T+6.1%	$2.1T+0.4%	$2.1T+1.6%	$2.0T+1.8%	$2.0T+2.1%	$1.9T-0.5%	$2.0T-1.4%	$2.0T-7.7%	$2.1T
Long-Term Debt	$169.3B+1.2%	$167.3B-94.8%	$3.2T+2.0%	$3.1T+5.3%	$3.0T+15.2%	$2.6T+25.1%	$2.1T+3.8%	$2.0T+1.6%	$2.0T	N/A	N/A	N/A	N/A	N/A	N/A
Total Equity	$70.4B+18.1%	$59.6B+24.8%	$47.7B+28.9%	$37.0B+32.1%	$28.0B+70.8%	$16.4B+79.9%	$9.1B+103.8%	$4.5B+1534.9%	-$312.0M-106.1%	$5.1B+72.6%	$2.9B+10.9%	$2.7B-79.3%	$12.8B+45.4%	$8.8B+6145.9%	-$146.0M
Retained Earnings	-$12.5B+46.1%	-$23.3B+33.8%	-$35.1B+23.1%	-$45.7B+17.0%	-$55.0B+18.0%	-$67.1B+9.6%	-$74.2B+5.2%	-$78.3B+6.0%	-$83.3B-6.8%	-$77.9B+3.5%	-$80.8B+1.1%	-$81.6B-17.1%	-$69.7B+1.5%	-$70.8B+5.0%	-$74.5B

Metric	Q2'2610-Q	Q4'2510-Q	Q3'2510-Q	Q2'2510-Q	Q1'2510-Q	Q4'2410-K	Q3'2410-Q	Q2'2410-Q
Total Assets	$3.5T+2.4%	$3.5T+3.3%	$3.5T+3.8%	$3.4T+3.9%	$3.4T+3.7%	$3.4T+3.2%	$3.3T+2.2%	$3.3T+1.7%
Cash & Equivalents	$4.3B+1.3%	$5.3B-3.7%	$4.6B-4.8%	$4.3B-22.9%	N/A	$5.5B-8.1%	$4.9B-9.3%	$5.5B+0.3%
Short-Term Investments	$0	$0	$0	$0	N/A	$0	$0	$0
Long-Term Investments	$0	$0	$0	$0	N/A	$0	$0	$0
Total Liabilities	$3.4T+2.0%	$3.4T+3.0%	$3.4T+3.5%	$3.4T+3.6%	$3.3T+3.4%	$3.3T+2.9%	$3.3T+1.8%	$3.3T+1.4%
Long-Term Debt	$163.7B	$169.3B+1.2%	N/A	N/A	N/A	$167.3B-94.8%	$3.3T+1.7%	$3.2T+1.3%
Total Equity	$77.8B+20.0%	$70.4B+18.1%	$67.6B+19.9%	$64.8B+21.8%	$62.4B+23.7%	$59.6B+24.8%	$56.4B+26.3%	$53.2B+26.9%
Retained Earnings	-$5.1B+71.6%	-$12.5B+46.1%	-$15.3B+42.2%	-$18.1B+38.9%	-$20.5B+36.7%	-$23.3B+33.8%	-$26.5B+30.4%	-$29.6B+27.3%

Not reported in any period shown, so not listed: Current Assets, Inventory, Accounts Receivable, Goodwill, Current Liabilities, Non-Current Liabilities.

FMCCJ Cash Flow Statement

FMCCJ quarterly cash flow statement

Metric	FY2510-K	FY2410-K	FY2310-K	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K	FY1410-K	FY1310-K	FY1210-K	FY1110-K
Operating Cash Flow	$19.4B+192.3%	$6.6B-13.0%	$7.6B-36.1%	$11.9B-27.1%	$16.4B+1703.0%	$907.0M-92.6%	$12.2B+1709.6%	$674.0M-84.0%	$4.2B-3.9%	$4.4B+570.6%	-$934.0M-110.5%	$8.9B-52.1%	$18.5B+118.9%	$8.5B-18.0%	$10.3B
Depreciation & Amortization	N/A	N/A	N/A	N/A	N/A	N/A	N/A	$5.3B-12.5%	$6.0B-14.8%	$7.1B+33.2%	$5.3B+51.3%	$3.5B-24.0%	$4.6B+0.1%	$4.6B+124.1%	$2.1B
Investing Cash Flow	$4.7B-50.7%	$9.6B-78.3%	$44.3B+288.3%	$11.4B-53.0%	$24.3B+129.1%	-$83.4B-273.1%	$48.2B-59.8%	$119.6B-17.2%	$144.6B-12.1%	$164.5B-8.0%	$178.9B	N/A	$391.3B-20.9%	$494.4B+32.3%	$373.7B
Financing Cash Flow	-$24.3B-45.3%	-$16.7B+67.9%	-$52.2B-92.6%	-$27.1B+50.1%	-$54.3B-153.7%	$101.1B+262.0%	-$62.4B+49.2%	-$122.9B+23.8%	-$161.2B+3.4%	-$166.8B+9.0%	-$183.3B	N/A	-$407.0B+22.1%	-$522.8B-33.2%	-$392.6B

Metric	Q2'2610-Q	Q4'2510-Q	Q3'2510-Q	Q2'2510-Q	Q1'2510-Q	Q4'2410-K	Q3'2410-Q	Q2'2410-Q
Operating Cash Flow	N/A	$2.6B+386.4%	$5.1B+37.1%	N/A	N/A	-$900.0M-147.8%	$3.7B+410.5%	$927.0M-41.0%
Investing Cash Flow	N/A	$4.7B+134.7%	-$881.0M-200.7%	N/A	N/A	-$13.6B-181.8%	$875.0M-96.1%	$13.4B+357.5%
Financing Cash Flow	N/A	-$6.6B-143.5%	-$3.8B+26.9%	N/A	N/A	$15.2B+185.1%	-$5.3B+77.4%	-$12.3B-153.7%

Not reported in any period shown, so not listed: Depreciation & Amortization, Stock-Based Compensation, Capital Expenditures, Free Cash Flow, Dividends Paid, Share Buybacks.

FMCCJ Financial Ratios

Margins and returns are percentages; the remaining ratios are unitless multiples. Each change compares the year with the year before it, and each quarter with the same quarter a year earlier.

FMCCJ quarterly financial ratios

Metric	FY2510-K	FY2410-K	FY2310-K	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K	FY1410-K	FY1310-K	FY1210-K	FY1110-K
Net Margin	46.1%-3.5pp	49.6%-0.1pp	49.6%+5.8pp	43.9%-11.3pp	55.2%+11.2pp	44.0%-7.3pp	51.2%-8.1pp	59.3%+32.6pp	26.7%-25.8pp	52.5%-3.7pp	56.2%+1.8pp	54.4%	194.8%	81.2%+151.2pp	-70.0%
Return on Equity	15.3%-4.7pp	19.9%-2.2pp	22.1%-3.1pp	25.2%-18.0pp	43.2%-1.4pp	44.6%-34.4pp	79.1%-127.2pp	206.3%	N/A	154.0%-62.9pp	216.9%-73.2pp	290.1%-89.1pp	379.2%+254.8pp	124.4%	N/A
Return on Assets	0.3%0.0pp	0.4%0.0pp	0.3%0.0pp	0.3%-0.1pp	0.4%+0.1pp	0.3%-0.1pp	0.3%-0.1pp	0.4%+0.2pp	0.3%-0.1pp	0.4%+0.1pp	0.3%-0.1pp	0.4%-2.1pp	2.5%+1.9pp	0.5%+0.8pp	-0.3%
Debt-to-Equity	2.41-0.4x	2.81-64.3x	67.10-17.7x	84.77-21.5x	106.31-51.3x	157.66-69.1x	226.78-218.6x	445.36	N/A	397.69-276.8x	674.47-58.4x	732.89+580.7x	152.18-72.2x	224.43	N/A
Asset Turnover	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.010.0x	0.00

Metric	Q2'2610-Q	Q4'2510-Q	Q3'2510-Q	Q2'2510-Q	Q1'2510-Q	Q4'2410-K	Q3'2410-Q	Q2'2410-Q
Net Margin	64.1%+23.7pp	N/A	48.3%-4.9pp	40.4%-5.8pp	N/A	50.9%-3.3pp	53.2%+6.0pp	46.2%-9.0pp
Return on Equity	4.9%+1.3pp	N/A	4.1%-1.4pp	3.7%-1.5pp	N/A	5.4%-0.7pp	5.5%-0.5pp	5.2%-1.8pp
Return on Assets	0.1%0.0pp	N/A	0.1%0.0pp	0.1%0.0pp	N/A	0.1%0.0pp	0.1%0.0pp	0.1%0.0pp
Debt-to-Equity	2.11-49.9x	2.41-0.4x	50.30-7.4x	52.02-8.5x	53.63-9.8x	2.81-64.3x	57.66-13.9x	60.48-15.3x
Asset Turnover	0.000.0x	N/A	0.000.0x	0.000.0x	N/A	0.000.0x	0.000.0x	0.000.0x

Not reported in any period shown, so not listed: Gross Margin, Operating Margin, Current Ratio, FCF Margin.

Where FREDDIE MAC VAR RT PFD Ranks

Frequently Asked Questions

What is FREDDIE MAC VAR RT PFD's annual revenue?

FREDDIE MAC VAR RT PFD (FMCCJ) reported $23.3B in total revenue for fiscal year 2025. This represents a -2.7% 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 FREDDIE MAC VAR RT PFD's revenue growing?

FREDDIE MAC VAR RT PFD (FMCCJ) revenue declined by 2.7% year-over-year, from $23.9B to $23.3B in fiscal year 2025.

Is FREDDIE MAC VAR RT PFD profitable?

Yes, FREDDIE MAC VAR RT PFD (FMCCJ) reported a net income of $10.7B in fiscal year 2025, with a net profit margin of 46.1%.

How much debt does FREDDIE MAC VAR RT PFD have?

As of fiscal year 2025, FREDDIE MAC VAR RT PFD (FMCCJ) had $5.3B in cash and equivalents against $169.3B in long-term debt.

What is FREDDIE MAC VAR RT PFD's net profit margin?

FREDDIE MAC VAR RT PFD (FMCCJ) had a net profit margin of 46.1% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.

What is FREDDIE MAC VAR RT PFD's return on equity (ROE)?

FREDDIE MAC VAR RT PFD (FMCCJ) has a return on equity of 15.3% for fiscal year 2025, measuring how efficiently the company generates profit from shareholder equity.

What is FREDDIE MAC VAR RT PFD's operating cash flow?

FREDDIE MAC VAR RT PFD (FMCCJ) generated $19.4B in operating cash flow during fiscal year 2025, representing cash generated from core business activities.

What are FREDDIE MAC VAR RT PFD's total assets?

FREDDIE MAC VAR RT PFD (FMCCJ) had $3.5T in total assets as of fiscal year 2025, including both current and long-term assets.

How many shares does FREDDIE MAC VAR RT PFD have outstanding?

FREDDIE MAC VAR RT PFD (FMCCJ) had 650M shares outstanding as of fiscal year 2025.

What is FREDDIE MAC VAR RT PFD's debt-to-equity ratio?

FREDDIE MAC VAR RT PFD (FMCCJ) had a debt-to-equity ratio of 2.41 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.

What is FREDDIE MAC VAR RT PFD's return on assets (ROA)?

FREDDIE MAC VAR RT PFD (FMCCJ) had a return on assets of 0.3% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.

What is FREDDIE MAC VAR RT PFD's Piotroski F-Score?

FREDDIE MAC VAR RT PFD (FMCCJ) has a Piotroski F-Score of 5 out of 7 computable signals; 2 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 FREDDIE MAC VAR RT PFD's earnings high quality?

FREDDIE MAC VAR RT PFD (FMCCJ) has an earnings quality ratio of 1.81x, considered cash-backed (high quality). 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.