What is SHELL PLC's earnings per share (EPS)?

SHELL PLC (RYDAF) reported diluted earnings per share of $3.00 for fiscal year 2025. This represents a 18.6% 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.

SHELL PLC (RYDAF) Financials

RYDAF

FY2025 annual

Revenue $266.9B -6.1% YoY

Net Income $18.1B +9.7% YoY

EPS (Diluted) $3.00 +18.6% YoY

Operating Cash Flow $42.9B -21.6% YoY

Market Cap $294.6B as of Oct 21, 2026

Price / Sales 1.1x on $266.9B revenue, FY2025

Price / Earnings 16.3x on $18.1B net income, FY2025

Price / Book 1.7x on $175.3B equity, Q4 FY2025

A multiple compares the market's price with a filed figure; it says what the market pays, not how the business is doing. The market capitalization is the vendor's as of Oct 21, 2026; every other figure is from the SEC filings on this page. Not financial advice.

Source SEC Filings (10-K/10-Q) Latest period FY2025, ended Dec 31, 2025 Reported Mar 12, 2026 Currency USD FYE December

Newest figures come from the 20-F for FY2025, filed Mar 12, 2026. Each column of the statement tables below links to the filing it was taken from, and every filing is listed on the RYDAF SEC filings page.

SHELL PLC (RYDAF) reported $266.9B in revenue for fiscal year 2025, down 6.1% from the prior fiscal year. This page shows its income statement, balance sheet, cash flow statement, and key financial ratios. View 11 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 RYDAF FY2025 2026-10-04

Shell operates as a cash-generating, balance-sheet-heavy business: lower recent revenue and profit have not erased substantial operating cash production.

From FY2022 to FY2025, revenue fell to $266.9B while operating cash flow declined to $42.9B; cash generation weakened, but it still exceeded reported net income. In FY2025, operating cash flow was more than twice net income, indicating that cash conversion does not track accounting profit one-for-one, with depreciation and working-capital movements likely contributing to the gap.

Net profit margin compressed from 11.2% in FY2022 to 5.8% in FY2024, then recovered to 6.8% in FY2025. The rebound occurred while revenue fell to $266.9B, pointing to margin recovery without top-line expansion rather than growth-driven operating leverage.

Assets contracted from $404.4B in FY2021 to $370.4B in FY2025, showing a smaller balance-sheet footprint. Debt-to-equity remained near 0.4x, while current liquidity narrowed to 1.3x, indicating that balance-sheet shrinkage has not produced a steadily wider short-term cushion.

Financial Health Signals

Financial health score not available

SHELL PLC 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

5/8

SHELL PLC passes 5 of 8 computable financial strength tests (1 of the nine could not be computed from available data). All 4 profitability signals pass (positive income, cash flow, and earnings quality), 1 of 3 leverage/liquidity signals pass, neither operating efficiency signal passes.

Earnings Quality Cash-Backed

2.37x

For every $1 of reported earnings, SHELL PLC generates $2.37 in operating cash flow ($42.9B OCF vs $18.1B net income). This indicates profits are well-supported by actual cash generation, not accounting adjustments.

Key Financial Metrics

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Earnings & Revenue

None of these metrics is reported for Q4 2025.

Cash & Balance Sheet

Cash & Debt

$30.2B

YoY-22.7%

QoQ-7.5%

5Y CAGR+7.1%

SHELL PLC held $30.2B in cash against $75.6B in long-term debt as of Q4 2025.

Shares Outstanding

5.69B

YoY-6.5%

SHELL PLC had 5.69B shares outstanding in Q4 2025. This represents a decrease of 6.5% from the same quarter a year earlier.

Free Cash Flow

Not reported for Q4 2025.

Dividends Per Share

Not reported for Q4 2025.

Margins & Returns

None of these metrics is reported for Q4 2025.

Capital Allocation

None of these metrics is reported for Q4 2025.

RYDAF 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.

RYDAF quarterly income statement

Metric	FY2520-F	FY2420-F	FY2320-F	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K
Revenue	$266.9B-6.1%	$284.3B-10.2%	$316.6B-17.0%	$381.3B+45.8%	$261.5B+44.8%	$180.5B-47.7%	$344.9B-11.2%	$388.4B+27.3%	$305.2B+30.6%	$233.6B-11.8%	$265.0B
Interest Expense	$4.7B-2.4%	$4.8B+2.4%	$4.7B+46.9%	$3.2B-11.8%	$3.6B-11.8%	$4.1B-12.8%	$4.7B+25.2%	$3.7B-7.3%	$4.0B+26.2%	$3.2B+69.7%	$1.9B
Income Tax	$11.6B-13.2%	$13.4B+3.2%	$13.0B-40.8%	$21.9B+138.5%	$9.2B+269.3%	-$5.4B-160.0%	$9.1B-22.7%	$11.7B+149.5%	$4.7B+466.3%	$829.0M+641.8%	-$153.0M
Net Income	$18.1B+9.7%	$16.5B-15.9%	$19.6B-54.2%	$42.9B+107.8%	$20.6B+195.8%	-$21.5B-231.0%	$16.4B-31.3%	$23.9B+77.9%	$13.4B+181.2%	$4.8B+117.1%	$2.2B
EPS (Basic)	$3.03+18.8%	$2.55-11.5%	$2.88-50.0%	$5.76+122.4%	$2.59+193.2%	-$2.78-241.1%	$1.97-30.1%	$2.82+78.5%	$1.58+172.4%	$0.58+87.1%	$0.31
EPS (Diluted)	$3.00+18.6%	$2.53-11.2%	$2.85-50.1%	$5.71+122.2%	$2.57+192.4%	-$2.78-242.6%	$1.95-30.4%	$2.80+79.5%	$1.56+169.0%	$0.58+93.3%	$0.30
Diluted Shares (Avg)	5.95B-6.5%	6.36B-6.4%	6.80B-8.2%	7.41B-5.1%	7.81B+0.1%	7.80B-3.9%	8.11B-2.8%	8.35B+0.6%	8.30B+5.2%	7.89B+23.4%	6.39B

Metric	Q4'2520-F	Q2'2510-Q	Q1'2510-Q	Q4'2420-F	Q2'2410-Q	Q1'2410-Q	Q4'2310-K	Q2'2310-Q
Revenue	N/A	$65.4B-12.2%	$69.2B-4.5%	N/A	$74.5B-0.2%	$72.5B-16.7%	N/A	$74.6B-25.5%
Interest Expense	N/A	$1.1B-13.0%	$1.1B-3.8%	N/A	$1.2B+2.0%	$1.2B-0.1%	N/A	$1.2B+74.2%
Income Tax	N/A	$2.3B-37.9%	$4.1B+13.3%	N/A	$3.8B+71.0%	$3.6B-35.4%	N/A	$2.2B-72.3%
Net Income	N/A	$3.6B-0.2%	$4.9B-34.5%	N/A	$3.6B+15.7%	$7.4B-15.2%	N/A	$3.2B-82.7%
EPS (Basic)	N/A	$0.61+10.9%	$0.79-30.7%	N/A	$0.55+19.6%	$1.14-9.5%	N/A	$0.46-81.0%
EPS (Diluted)	N/A	$0.60+9.1%	$0.79-30.1%	N/A	$0.55+19.6%	$1.13-9.6%	N/A	$0.46-80.8%
Diluted Shares (Avg)	N/A	6.00B-6.4%	6.09B-6.4%	N/A	6.42B-6.4%	6.50B-6.8%	N/A	6.85B-8.8%

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

RYDAF Balance Sheet

RYDAF quarterly balance sheet

Metric	FY2520-F	FY2420-F	FY2320-F	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K
Total Assets	$370.4B-4.5%	$387.6B-4.6%	$406.3B-8.3%	$443.0B+9.6%	$404.4B+6.6%	$379.3B-6.2%	$404.3B+1.3%	$399.2B-1.9%	$407.1B-1.0%	$411.3B	N/A
Current Assets	$107.2B-16.2%	$127.9B-4.6%	$134.1B-19.2%	$165.9B+28.9%	$128.8B+40.0%	$92.0B-0.8%	$92.7B-4.9%	$97.5B+2.2%	$95.4B+10.2%	$86.6B	N/A
Cash & Equivalents	$30.2B-22.7%	$39.1B+0.9%	$38.8B-3.7%	$40.2B+8.9%	$37.0B+16.1%	$31.8B+76.3%	$18.1B-32.5%	$26.7B+31.7%	$20.3B+6.2%	$19.1B-39.8%	$31.8B
Inventory	$22.2B-5.2%	$23.4B-10.0%	$26.0B-18.4%	$31.9B+26.3%	$25.3B+29.8%	$19.5B-19.2%	$24.1B+14.0%	$21.1B-16.3%	$25.2B+15.8%	$21.8B	N/A
Accounts Receivable	$44.6B-2.8%	$45.9B-13.9%	$53.3B-19.9%	$66.5B+25.0%	$53.2B+58.2%	$33.6B-22.5%	$43.4B+2.3%	$42.4B-4.8%	$44.6B-2.4%	$45.7B	N/A
Goodwill	$15.7B-2.3%	$16.0B-3.8%	$16.7B+3.9%	$16.0B+7.5%	$14.9B-34.3%	$22.7B-3.3%	$23.5B-0.4%	$23.6B-2.5%	$24.2B+0.9%	$24.0B	N/A
Total Liabilities	$195.0B-6.0%	$207.4B-4.8%	$217.9B-13.0%	$250.4B+9.3%	$229.1B+3.8%	$220.7B+3.2%	$213.9B+8.8%	$196.7B-6.0%	$209.3B-6.1%	$222.8B	N/A
Current Liabilities	$82.4B-13.3%	$95.0B-0.5%	$95.5B-21.3%	$121.3B+27.0%	$95.5B+29.6%	$73.7B-7.4%	$79.6B+2.3%	$77.8B-2.4%	$79.8B+8.0%	$73.8B	N/A
Non-Current Liabilities	$112.6B+0.2%	$112.4B-8.2%	$122.4B-5.2%	$129.1B-3.3%	$133.5B-9.2%	$147.0B+9.5%	$134.2B+13.0%	$118.8B-8.2%	$129.5B-13.0%	$148.9B	N/A
Long-Term Debt	$75.6B-1.9%	$77.1B-5.5%	$81.5B-2.7%	$83.8B-5.9%	$89.1B-17.5%	$108.0B+12.0%	$96.4B+25.5%	$76.8B-10.3%	$85.7B-7.4%	$92.5B	N/A
Total Equity	$175.3B-2.7%	$180.2B-4.4%	$188.4B-2.2%	$192.6B+9.9%	$175.3B+10.6%	$158.5B-16.8%	$190.5B-6.0%	$202.5B+2.4%	$197.8B+4.9%	$188.5B+14.9%	$164.1B
Retained Earnings	$153.5B-3.3%	$158.8B-4.3%	$165.9B-2.1%	$169.5B+10.8%	$153.0B+7.3%	$142.6B-17.3%	$172.4B-5.6%	$182.6B+2.8%	$177.6B+1.2%	$175.6B	N/A

Metric	Q4'2520-F	Q2'2510-Q	Q1'2510-Q	Q4'2420-F	Q2'2410-Q	Q1'2410-Q	Q4'2310-K	Q2'2310-Q
Total Assets	$370.4B-4.5%	$387.9B-1.7%	N/A	$387.6B-4.6%	$394.8B-4.9%	N/A	$406.3B-8.3%	$415.0B-7.3%
Current Assets	$107.2B-16.2%	$121.6B-5.5%	N/A	$127.9B-4.6%	$128.6B-8.4%	N/A	$134.1B-19.2%	$140.5B-15.0%
Cash & Equivalents	$30.2B-22.7%	$32.7B-14.3%	$35.6B-10.9%	$39.1B+0.9%	$38.1B-15.4%	$39.9B-5.1%	$38.8B-3.7%	$45.1B+15.7%
Inventory	$22.2B-5.2%	$23.3B-12.0%	N/A	$23.4B-10.0%	$26.4B-1.9%	N/A	$26.0B-18.4%	$27.0B-25.3%
Accounts Receivable	$44.6B-2.8%	$45.6B-10.0%	N/A	$45.9B-13.9%	$50.6B-3.4%	N/A	$53.3B-19.9%	$52.4B-21.5%
Goodwill	$15.7B-2.3%	$16.3B-1.2%	N/A	$16.0B-3.8%	$16.5B-6.3%	N/A	$16.7B+3.9%	$17.7B-30.9%
Total Liabilities	$195.0B-6.0%	$204.8B-1.3%	N/A	$207.4B-4.8%	$207.6B-6.9%	N/A	$217.9B-13.0%	$222.9B-12.1%
Current Liabilities	$82.4B-13.3%	$92.0B+0.6%	N/A	$95.0B-0.5%	$91.5B-4.8%	N/A	$95.5B-21.3%	$96.1B-19.0%
Non-Current Liabilities	$112.6B+0.2%	$112.8B-2.8%	N/A	$112.4B-8.2%	$116.1B-8.4%	N/A	$122.4B-5.2%	$126.8B-6.0%
Long-Term Debt	$75.6B-1.9%	$75.7B+0.3%	$76.5B-4.3%	$77.1B-5.5%	$75.5B-10.5%	$79.9B	$81.5B-2.7%	$84.4B+50.2%
Total Equity	$175.3B-2.7%	$183.1B-2.2%	N/A	$180.2B-4.4%	$187.2B-2.6%	N/A	$188.4B-2.2%	$192.1B-1.1%
Retained Earnings	$153.5B-3.3%	N/A	N/A	$158.8B-4.3%	N/A	N/A	$165.9B-2.1%	N/A

Not reported in any period shown, so not listed: Short-Term Investments, Long-Term Investments.

RYDAF Cash Flow Statement

RYDAF quarterly cash flow statement

Metric	FY2520-F	FY2420-F	FY2320-F	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K
Operating Cash Flow	$42.9B-21.6%	$54.7B+0.9%	$54.2B-20.8%	$68.4B+51.7%	$45.1B+32.3%	$34.1B-19.1%	$42.2B-20.5%	$53.1B+48.9%	$35.6B+72.9%	$20.6B-30.8%	$29.8B
Depreciation & Amortization	$25.3B-5.9%	$26.9B-14.1%	$31.3B+68.9%	$18.5B-31.2%	$26.9B-48.7%	$52.4B+82.7%	$28.7B+29.7%	$22.1B-15.6%	$26.2B+4.9%	$25.0B-6.4%	$26.7B
Investing Cash Flow	-$16.8B-10.9%	-$15.2B+14.5%	-$17.7B+21.0%	-$22.4B-371.5%	-$4.8B+64.1%	-$13.3B+15.9%	-$15.8B-15.5%	-$13.7B-70.1%	-$8.0B+74.1%	-$31.0B-38.2%	-$22.4B
Financing Cash Flow	-$35.8B+6.8%	-$38.4B-0.5%	-$38.2B+8.9%	-$42.0B-21.0%	-$34.7B-379.8%	-$7.2B+79.5%	-$35.2B-8.2%	-$32.5B-20.2%	-$27.1B-3413.1%	-$771.0M-120.2%	$3.8B
Dividends Paid	$8.5B-2.3%	$8.7B+3.3%	$8.4B+13.3%	$7.4B+18.4%	$6.3B-15.8%	$7.4B-51.2%	$15.2B-3.0%	$15.7B+44.1%	$10.9B+12.4%	$9.7B+3.3%	$9.4B
Share Buybacks	$14.1B+0.1%	$14.1B-3.5%	$14.6B-21.4%	$18.5B+428.0%	$3.5B+189.4%	$1.2B-88.2%	$10.3B+127.6%	$4.5B	N/A	N/A	$1.0M

Metric	Q4'2520-F	Q2'2510-Q	Q1'2510-Q	Q4'2420-F	Q2'2410-Q	Q1'2410-Q	Q4'2310-K	Q2'2310-Q
Operating Cash Flow	N/A	$11.9B-11.6%	$9.3B-30.4%	N/A	$13.5B-10.7%	$13.3B-5.9%	N/A	$15.1B-18.9%
Depreciation & Amortization	N/A	$6.7B-11.7%	$5.4B-7.5%	N/A	$7.6B-4.0%	$5.9B-6.4%	N/A	$7.9B+2362.1%
Investing Cash Flow	N/A	-$5.4B-62.0%	-$4.0B-12.2%	N/A	-$3.3B-10.7%	-$3.5B+16.8%	N/A	-$3.0B+51.4%
Financing Cash Flow	N/A	-$10.1B+14.7%	-$9.2B-11.3%	N/A	-$11.8B-31.6%	-$8.2B+1.6%	N/A	-$9.0B+19.3%
Dividends Paid	N/A	$2.1B-2.5%	$2.2B-1.4%	N/A	$2.2B+9.8%	$2.2B+8.9%	N/A	$2.0B+7.1%

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

RYDAF 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.

RYDAF quarterly financial ratios

Metric	FY2520-F	FY2420-F	FY2320-F	FY2210-K	FY2110-K	FY2010-K	FY1910-K	FY1810-K	FY1710-K	FY1610-K	FY1510-K
Net Margin	6.8%+1.0pp	5.8%-0.4pp	6.2%-5.0pp	11.2%+3.4pp	7.9%+19.8pp	-11.9%-16.7pp	4.8%-1.4pp	6.2%+1.8pp	4.4%+2.3pp	2.1%+1.2pp	0.8%
Return on Equity	10.3%+1.2pp	9.2%-1.2pp	10.4%-11.8pp	22.3%+10.5pp	11.8%+25.4pp	-13.6%-22.2pp	8.6%-3.2pp	11.8%+5.0pp	6.8%+4.3pp	2.5%+1.2pp	1.3%
Return on Assets	4.9%+0.6pp	4.3%-0.6pp	4.8%-4.8pp	9.7%+4.6pp	5.1%+10.8pp	-5.7%-9.7pp	4.1%-1.9pp	6.0%+2.7pp	3.3%+2.1pp	1.2%	N/A
Current Ratio	1.300.0x	1.35-0.1x	1.400.0x	1.370.0x	1.35+0.1x	1.25+0.1x	1.16-0.1x	1.25+0.1x	1.200.0x	1.17	N/A
Debt-to-Equity	0.430.0x	0.430.0x	0.430.0x	0.44-0.1x	0.51-0.2x	0.68+0.2x	0.51+0.1x	0.38-0.1x	0.43-0.1x	0.49	N/A
Asset Turnover	0.720.0x	0.730.0x	0.78-0.1x	0.86+0.2x	0.65+0.2x	0.48-0.4x	0.85-0.1x	0.97+0.2x	0.75+0.2x	0.57	N/A

Metric	Q4'2520-F	Q2'2510-Q	Q1'2510-Q	Q4'2420-F	Q2'2410-Q	Q1'2410-Q	Q4'2310-K	Q2'2310-Q
Net Margin	N/A	5.6%+0.7pp	7.0%-3.2pp	N/A	4.9%+0.7pp	10.3%+0.2pp	N/A	4.2%-14.0pp
Return on Equity	N/A	2.0%0.0pp	N/A	N/A	1.9%+0.3pp	N/A	N/A	1.6%-7.8pp
Return on Assets	N/A	0.9%0.0pp	N/A	N/A	0.9%+0.2pp	N/A	N/A	0.8%-3.3pp
Current Ratio	1.300.0x	1.32-0.1x	N/A	1.35-0.1x	1.41-0.1x	N/A	1.400.0x	1.46+0.1x
Debt-to-Equity	0.430.0x	0.410.0x	N/A	0.430.0x	0.400.0x	N/A	0.430.0x	0.44+0.2x
Asset Turnover	N/A	0.170.0x	N/A	N/A	0.190.0x	N/A	N/A	0.180.0x

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

Where SHELL PLC Ranks

Frequently Asked Questions

What is SHELL PLC's annual revenue?

SHELL PLC (RYDAF) reported $266.9B in total revenue for fiscal year 2025. This represents a -6.1% 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 SHELL PLC's revenue growing?

SHELL PLC (RYDAF) revenue declined by 6.1% year-over-year, from $284.3B to $266.9B in fiscal year 2025.

Is SHELL PLC profitable?

Yes, SHELL PLC (RYDAF) reported a net income of $18.1B in fiscal year 2025, with a net profit margin of 6.8%.

How much debt does SHELL PLC have?

As of fiscal year 2025, SHELL PLC (RYDAF) had $30.2B in cash and equivalents against $75.6B in long-term debt.

What is SHELL PLC's net profit margin?

SHELL PLC (RYDAF) had a net profit margin of 6.8% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.

What is SHELL PLC's return on equity (ROE)?

SHELL PLC (RYDAF) has a return on equity of 10.3% for fiscal year 2025, measuring how efficiently the company generates profit from shareholder equity.

What is SHELL PLC's operating cash flow?

SHELL PLC (RYDAF) generated $42.9B in operating cash flow during fiscal year 2025, representing cash generated from core business activities.

What are SHELL PLC's total assets?

SHELL PLC (RYDAF) had $370.4B in total assets as of fiscal year 2025, including both current and long-term assets.

Does SHELL PLC buy back shares?

Yes, SHELL PLC (RYDAF) spent $14.1B on share buybacks during fiscal year 2025, returning capital to shareholders by reducing shares outstanding.

How many shares does SHELL PLC have outstanding?

SHELL PLC (RYDAF) had 5.69B shares outstanding as of fiscal year 2025.

What is SHELL PLC's current ratio?

SHELL PLC (RYDAF) had a current ratio of 1.30 as of fiscal year 2025, which is considered adequate.

What is SHELL PLC's debt-to-equity ratio?

SHELL PLC (RYDAF) had a debt-to-equity ratio of 0.43 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.

What is SHELL PLC's return on assets (ROA)?

SHELL PLC (RYDAF) had a return on assets of 4.9% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.

What is SHELL PLC's P/E ratio?

SHELL PLC (RYDAF) trades at 16.3x earnings, its market capitalization divided by net income of $18.1B net income, FY2025. The market capitalization is $294.6B as of Oct 21, 2026; a multiple compares that price with a filed figure and says nothing about the quality of the business.

What is SHELL PLC's price-to-sales ratio?

SHELL PLC (RYDAF) trades at 1.1x sales, its market capitalization divided by revenue of $266.9B revenue, FY2025. The market capitalization is $294.6B as of Oct 21, 2026; a multiple compares that price with a filed figure and says nothing about the quality of the business.

What is SHELL PLC's Piotroski F-Score?

SHELL PLC (RYDAF) has a Piotroski F-Score of 5 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 SHELL PLC's earnings high quality?

SHELL PLC (RYDAF) has an earnings quality ratio of 2.37x, 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.