What is Trinseo Plc's earnings per share (EPS)?

Trinseo Plc (TSEOF) reported diluted earnings per share of $-15.24 for fiscal year 2025. This represents a -54.6% 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.

Trinseo Plc Financials

TSEOF

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

This page shows Trinseo Plc (TSEOF) financial statements, including the income statement, balance sheet, cash flow statement, and key financial ratios. View 14 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 TSEOF FY2025 2026-04-22

A shrinking asset base and stable debt load have turned operating weakness into a balance-sheet squeeze.

Debt became heavier without much new debt: the asset base kept contracting and goodwill was pared back, yet long-term borrowings stayed broadly flat, so each dollar of debt is now supported by a thinner operating cushion. That is why equity moved from $1.0B to -$1.1B even though borrowings did not surge—the balance sheet lost its buffer faster than it reduced obligations.

Here, gross margin was only 5.6%, leaving just $165.9M of gross profit to cover the rest of the cost structure. With SG&A at $417M, the core issue is not only lower sales; overhead now sits well above the value left after production costs.

Liquidity is still technically positive at 1.2x current ratio, but cash was only $146.7M against a much larger pool of near-term obligations and working-capital needs. The more important shift is cash conversion: operating cash flow went from $452.7M in FY2021 to -$102.4M in FY2025, showing that accounting losses have now become real cash strain rather than a mainly non-cash earnings problem.

Financial Health Signals

Financial health score pending refresh

We are recalculating Trinseo Plc'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

0.19

Trinseo Plc scores 0.19, below the 1.81 distress threshold. 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 Weak

1/9

Trinseo Plc passes 1 of 9 financial strength tests. 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

0.19x

For every $1 of reported earnings, Trinseo Plc generates $0.19 in operating cash flow (-$102.4M OCF vs -$545.6M 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

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Earnings & Revenue

Revenue

$3.0B

YoY-15.3%

5Y CAGR+1.6%

10Y CAGR-2.8%

Trinseo Plc generated $3.0B in revenue in fiscal year 2025. This represents a decrease of 15.3% from the prior year.

EBITDA

$37.4M

YoY-77.2%

5Y CAGR-31.2%

10Y CAGR-22.8%

Trinseo Plc's EBITDA was $37.4M in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization. This represents a decrease of 77.2% from the prior year.

Net Income

-$545.6M

YoY-56.6%

Trinseo Plc reported -$545.6M in net income in fiscal year 2025. This represents a decrease of 56.6% from the prior year.

EPS (Diluted)

$-15.24

YoY-54.6%

Trinseo Plc earned $-15.24 per diluted share (EPS) in fiscal year 2025. This represents a decrease of 54.6% from the prior year.

Cash & Balance Sheet

Free Cash Flow

-$153.4M

YoY-97.9%

Trinseo Plc generated -$153.4M in free cash flow in fiscal year 2025, representing cash available after capex. This represents a decrease of 97.9% from the prior year.

Cash & Debt

$146.7M

YoY-30.1%

5Y CAGR-24.3%

10Y CAGR-10.2%

Trinseo Plc held $146.7M in cash against $2.3B in long-term debt as of fiscal year 2025.

Dividends Per Share

$0.02

YoY-50.0%

5Y CAGR-56.5%

Trinseo Plc paid $0.02 per share in dividends in fiscal year 2025. This represents a decrease of 50.0% from the prior year.

Shares Outstanding

36M

YoY+1.7%

5Y CAGR-1.3%

10Y CAGR-3.0%

Trinseo Plc had 36M shares outstanding in fiscal year 2025. This represents an increase of 1.7% from the prior year.

Margins & Returns

Gross Margin

5.6%

YoY-2.0pp

5Y CAGR-6.1pp

10Y CAGR-6.2pp

Trinseo Plc's gross margin was 5.6% in fiscal year 2025, indicating the percentage of revenue retained after direct costs. This is down 2.0 percentage points from the prior year.

Operating Margin

-8.5%

YoY-7.2pp

5Y CAGR-14.0pp

10Y CAGR-18.6pp

Trinseo Plc's operating margin was -8.5% in fiscal year 2025, reflecting core business profitability. This is down 7.2 percentage points from the prior year.

Net Margin

-18.3%

YoY-8.4pp

5Y CAGR-18.6pp

10Y CAGR-21.7pp

Trinseo Plc's net profit margin was -18.3% in fiscal year 2025, showing the share of revenue converted to profit. This is down 8.4 percentage points from the prior year.

Return on Equity

N/A

Capital Allocation

R&D Spending

N/A

Share Buybacks

N/A

Capital Expenditures

$51.0M

YoY-19.4%

5Y CAGR-5.2%

10Y CAGR-7.3%

Trinseo Plc invested $51.0M in capex in fiscal year 2025, funding long-term assets and infrastructure. This represents a decrease of 19.4% from the prior year.

TSEOF Income Statement

Metric	FY25	FY24	FY23	FY22	FY21	FY20
Revenue	$3.0B-15.3%	$3.5B-4.4%	$3.7B-26.0%	$5.0B+2.9%	$4.8B+75.9%	$2.7B
Cost of Revenue	$2.8B-13.5%	$3.2B-8.1%	$3.5B-24.7%	$4.7B+13.7%	$4.1B+70.4%	$2.4B
Gross Profit	$165.9M-37.5%	$265.6M+86.6%	$142.3M-47.7%	$272.3M-61.0%	$698.9M+117.7%	$321.1M
R&D Expenses	N/A	N/A	N/A	N/A	N/A	N/A
SG&A Expenses	$417.0M+27.5%	$327.0M+5.4%	$310.3M-22.2%	$398.8M+23.3%	$323.4M+42.2%	$227.5M
Operating Income	-$254.2M-452.6%	-$46.0M+89.9%	-$455.4M-25.1%	-$363.9M-178.9%	$461.4M+208.4%	$149.6M
Interest Expense	N/A	N/A	N/A	N/A	N/A	N/A
Income Tax	$42.6M+39.7%	$30.5M-55.4%	$68.4M+264.4%	-$41.6M-158.7%	$70.9M+66.0%	$42.7M
Net Income	-$545.6M-56.6%	-$348.5M+50.3%	-$701.3M-62.8%	-$430.9M-197.9%	$440.0M+5469.6%	$7.9M
EPS (Diluted)	$-15.24-54.6%	$-9.86+50.4%	$-19.88-65.8%	$-11.99-207.8%	$11.12+5460.0%	$0.20

Metric	Q1'26	Q4'25	Q3'25	Q2'25	Q1'25	Q4'24	Q3'24	Q2'24
Revenue	$724.7M+9.4%	$662.6M-10.8%	$743.2M-5.2%	$784.3M-0.1%	$784.8M-4.5%	$821.5M-5.3%	$867.7M-5.7%	$920.0M
Cost of Revenue	$663.0M+4.5%	$634.5M-10.1%	$705.8M-5.6%	$747.7M+3.7%	$721.0M-5.8%	$765.5M-2.7%	$787.1M-7.6%	$851.6M
Gross Profit	$61.7M+119.6%	$28.1M-24.9%	$37.4M+2.2%	$36.6M-42.6%	$63.8M+13.9%	$56.0M-30.5%	$80.6M+17.8%	$68.4M
R&D Expenses	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
SG&A Expenses	$87.4M-52.7%	$184.7M+192.2%	$63.2M-19.1%	$78.1M-14.2%	$91.0M+1.3%	$89.8M-7.4%	$97.0M+38.4%	$70.1M
Operating Income	-$23.6M+85.6%	-$163.7M-480.5%	-$28.2M+15.3%	-$33.3M-14.8%	-$29.0M+34.4%	-$44.2M-256.5%	-$12.4M-189.2%	$13.9M
Interest Expense	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Income Tax	$9.4M-62.7%	$25.2M+203.6%	$8.3M+232.0%	$2.5M-62.1%	$6.6M+371.4%	$1.4M-58.8%	$3.4M-83.3%	$20.3M
Net Income	-$115.9M+53.9%	-$251.4M-129.2%	-$109.7M-4.0%	-$105.5M-33.5%	-$79.0M+33.0%	-$117.9M-35.1%	-$87.3M-28.8%	-$67.8M
EPS (Diluted)	$-3.20	N/A	$-3.05-3.4%	$-2.95-32.9%	$-2.22	N/A	$-2.47-28.6%	$-1.92

TSEOF Balance Sheet

Metric	FY25	FY24	FY23	FY22	FY21	FY20
Total Assets	$2.3B-13.8%	$2.6B-12.7%	$3.0B-19.4%	$3.8B-20.2%	$4.7B+65.6%	$2.8B
Current Assets	$864.7M-12.5%	$988.2M-17.2%	$1.2B-14.1%	$1.4B-29.7%	$2.0B+30.4%	$1.5B
Cash & Equivalents	$146.7M-30.1%	$209.8M-19.0%	$259.1M+22.4%	$211.7M-63.1%	$573.0M-2.7%	$588.7M
Inventory	$316.0M-9.0%	$347.2M-14.2%	$404.7M-26.9%	$553.6M-10.9%	$621.0M+91.6%	$324.1M
Accounts Receivable	N/A	N/A	N/A	N/A	N/A	N/A
Goodwill	$67.7M+13.0%	$59.9M-6.1%	$63.8M-84.5%	$410.4M-42.2%	$710.1M+1043.5%	$62.1M
Total Liabilities	$3.4B+3.5%	$3.3B-1.0%	$3.3B-1.3%	$3.3B-9.7%	$3.7B+64.0%	$2.3B
Current Liabilities	$714.7M-0.9%	$720.9M+7.2%	$672.6M-2.4%	$689.4M-24.6%	$914.4M+71.5%	$533.3M
Long-Term Debt	$2.3B+6.0%	$2.2B-3.4%	$2.3B-1.0%	$2.3B-0.2%	$2.3B+99.1%	$1.2B
Total Equity	-$1.1B-77.1%	-$619.9M-131.3%	-$268.0M-163.8%	$420.3M-58.5%	$1.0B+71.6%	$590.3M
Retained Earnings	-$1.3B-68.9%	-$792.8M-79.0%	-$443.0M-267.5%	$264.5M-64.3%	$741.8M+0.4%	$739.2M

Metric	Q1'26	Q4'25	Q3'25	Q2'25	Q1'25	Q4'24	Q3'24	Q2'24
Total Assets	$2.3B+1.3%	$2.3B-8.5%	$2.5B-5.3%	$2.6B-0.9%	$2.7B+0.4%	$2.6B-8.3%	$2.9B+1.2%	$2.8B
Current Assets	$943.7M+9.1%	$864.7M-6.3%	$922.4M-8.3%	$1.0B-2.9%	$1.0B+4.8%	$988.2M-11.7%	$1.1B+2.4%	$1.1B
Cash & Equivalents	$110.6M-24.6%	$146.7M+30.9%	$112.1M-18.2%	$137.0M+8.6%	$126.1M-39.9%	$209.8M+26.9%	$165.3M+56.5%	$105.6M
Inventory	$323.4M+2.3%	$316.0M-10.1%	$351.4M-7.0%	$378.0M-1.5%	$383.7M+10.5%	$347.2M-20.1%	$434.8M+5.9%	$410.4M
Accounts Receivable	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Goodwill	$66.2M-2.2%	$67.7M0.0%	$67.7M+0.1%	$67.6M+8.3%	$62.4M+4.2%	$59.9M-7.3%	$64.6M+4.7%	$61.7M
Total Liabilities	$3.5B+4.6%	$3.4B+0.7%	$3.4B-0.9%	$3.4B+1.4%	$3.3B+2.2%	$3.3B-2.9%	$3.4B+3.1%	$3.3B
Current Liabilities	$3.2B+347.8%	$714.7M+6.0%	$674.2M-4.7%	$707.7M+2.7%	$689.3M-4.4%	$720.9M-11.5%	$814.2M+23.0%	$662.1M
Long-Term Debt	$2.2M-99.9%	$2.3B0.0%	$2.3B+0.5%	$2.3B+0.7%	$2.3B+4.7%	$2.2B+0.6%	$2.2B-3.9%	$2.3B
Total Equity	-$1.2B-11.4%	-$1.1B-27.4%	-$861.6M-14.8%	-$750.3M-10.5%	-$679.2M-9.6%	-$619.9M-29.1%	-$480.0M-16.0%	-$413.8M
Retained Earnings	-$1.5B-8.7%	-$1.3B-23.1%	-$1.1B-11.2%	-$978.1M-12.1%	-$872.2M-10.0%	-$792.8M-17.5%	-$674.6M-14.9%	-$586.9M

TSEOF Cash Flow Statement

Metric	FY25	FY24	FY23	FY22	FY21	FY20
Operating Cash Flow	-$102.4M-621.1%	-$14.2M-109.5%	$148.7M+241.8%	$43.5M-90.4%	$452.7M+77.3%	$255.4M
Capital Expenditures	$51.0M-19.4%	$63.3M-9.2%	$69.7M-53.0%	$148.2M+25.9%	$117.7M+76.7%	$66.6M
Free Cash Flow	-$153.4M-97.9%	-$77.5M-198.1%	$79.0M+175.5%	-$104.7M-131.3%	$335.0M+77.4%	$188.8M
Investing Cash Flow	-$41.0M+25.6%	-$55.1M-73.8%	-$31.7M+80.7%	-$164.0M+89.3%	-$1.5B-6262.4%	-$24.2M
Financing Cash Flow	$73.5M+178.4%	$26.4M+140.0%	-$66.0M+71.8%	-$233.7M-121.7%	$1.1B+1131.4%	-$104.3M
Dividends Paid	$1.2M-29.4%	$1.7M-90.5%	$17.9M-62.3%	$47.5M+116.9%	$21.9M-64.6%	$61.8M
Share Buybacks	N/A	N/A	N/A	$151.9M+215.8%	$48.1M+92.4%	$25.0M

Metric	Q1'26	Q4'25	Q3'25	Q2'25	Q1'25	Q4'24	Q3'24	Q2'24
Operating Cash Flow	-$232.9M-1130.5%	$22.6M+204.6%	-$21.6M-417.6%	$6.8M+106.2%	-$110.2M-229.5%	$85.1M+867.0%	$8.8M+121.0%	-$41.9M
Capital Expenditures	$11.3M-29.4%	$16.0M-3.0%	$16.5M+68.4%	$9.8M+12.6%	$8.7M-59.0%	$21.2M+73.8%	$12.2M-14.1%	$14.2M
Free Cash Flow	-$244.2M-3800.0%	$6.6M+117.3%	-$38.1M-1170.0%	-$3.0M+97.5%	-$118.9M-286.1%	$63.9M+1979.4%	-$3.4M+93.9%	-$56.1M
Investing Cash Flow	-$7.7M-28.3%	-$6.0M+63.6%	-$16.5M-68.4%	-$9.8M-12.6%	-$8.7M+59.0%	-$21.2M-73.8%	-$12.2M-14.0%	-$10.7M
Financing Cash Flow	$207.8M+1087.4%	$17.5M+26.8%	$13.8M+46.8%	$9.4M-71.3%	$32.8M+329.4%	-$14.3M-123.6%	$60.5M+670.8%	-$10.6M
Dividends Paid	$500K	$0-100.0%	$300K-25.0%	$400K-20.0%	$500K+25.0%	$400K0.0%	$400K+33.3%	$300K
Share Buybacks	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A

TSEOF Financial Ratios

Metric	FY25	FY24	FY23	FY22	FY21	FY20
Gross Margin	5.6%-2.0pp	7.6%+3.7pp	3.9%-1.6pp	5.5%-9.0pp	14.5%+2.8pp	11.7%
Operating Margin	-8.5%-7.2pp	-1.3%+11.1pp	-12.4%-5.1pp	-7.3%-16.9pp	9.6%+4.1pp	5.5%
Net Margin	-18.3%-8.4pp	-9.9%+9.2pp	-19.1%-10.4pp	-8.7%-17.8pp	9.1%+8.8pp	0.3%
Return on Equity	N/A	N/A	N/A	-102.5%-145.9pp	43.4%+42.1pp	1.3%
Return on Assets	-23.9%-10.8pp	-13.2%+10.0pp	-23.2%-11.7pp	-11.5%-20.8pp	9.3%+9.1pp	0.3%
Current Ratio	1.21-0.2	1.37-0.4	1.78-0.2	2.02-0.1	2.16-0.7	2.84
Debt-to-Equity	-2.12+1.4	-3.55+4.9	-8.50-14.0	5.48+3.2	2.28+0.3	1.96
FCF Margin	-5.2%-2.9pp	-2.2%-4.4pp	2.1%+4.3pp	-2.1%-9.0pp	6.9%+0.1pp	6.9%

Metric	Q1'26	Q4'25	Q3'25	Q2'25	Q1'25	Q4'24	Q3'24	Q2'24
Gross Margin	8.5%+4.3pp	4.2%-0.8pp	5.0%+0.4pp	4.7%-3.5pp	8.1%+1.3pp	6.8%-2.5pp	9.3%+1.9pp	7.4%
Operating Margin	-3.3%+21.4pp	-24.7%-20.9pp	-3.8%+0.5pp	-4.3%-0.6pp	-3.7%+1.7pp	-5.4%-4.0pp	-1.4%-2.9pp	1.5%
Net Margin	-16.0%+22.0pp	-37.9%-23.2pp	-14.8%-1.3pp	-13.5%-3.4pp	-10.1%+4.3pp	-14.3%-4.3pp	-10.1%-2.7pp	-7.4%
Return on Equity	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Return on Assets	-5.0%+6.0pp	-11.0%-6.6pp	-4.4%-0.4pp	-4.0%-1.0pp	-3.0%+1.5pp	-4.5%-1.4pp	-3.0%-0.6pp	-2.4%
Current Ratio	0.29-0.9	1.21-0.2	1.37-0.1	1.42-0.1	1.50+0.1	1.370.0	1.38-0.3	1.65
Debt-to-Equity	-0.00+2.1	-2.12+0.6	-2.71+0.4	-3.09+0.3	-3.39+0.2	-3.55+1.0	-4.56+0.9	-5.50
FCF Margin	-33.7%-34.7pp	1.0%+6.1pp	-5.1%-4.8pp	-0.4%+14.8pp	-15.2%-22.9pp	7.8%+8.2pp	-0.4%+5.7pp	-6.1%

Note: Shareholder equity is negative (-$1.1B), which causes debt-to-equity and return on equity ratios to appear negative or not meaningful. This can occur from accumulated losses or large share buyback programs.

Frequently Asked Questions

What is Trinseo Plc's annual revenue?

Trinseo Plc (TSEOF) reported $3.0B in total revenue for fiscal year 2025. This represents a -15.3% 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 Trinseo Plc's revenue growing?

Trinseo Plc (TSEOF) revenue declined by 15.3% year-over-year, from $3.5B to $3.0B in fiscal year 2025.

Is Trinseo Plc profitable?

No, Trinseo Plc (TSEOF) reported a net income of -$545.6M in fiscal year 2025, with a net profit margin of -18.3%.

What is Trinseo Plc's EBITDA?

Trinseo Plc (TSEOF) had EBITDA of $37.4M in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization.

How much debt does Trinseo Plc have?

As of fiscal year 2025, Trinseo Plc (TSEOF) had $146.7M in cash and equivalents against $2.3B in long-term debt.

What is Trinseo Plc's gross margin?

Trinseo Plc (TSEOF) had a gross margin of 5.6% in fiscal year 2025, indicating the percentage of revenue retained after direct costs of goods sold.

What is Trinseo Plc's operating margin?

Trinseo Plc (TSEOF) had an operating margin of -8.5% in fiscal year 2025, reflecting the profitability of core business operations before interest and taxes.

What is Trinseo Plc's net profit margin?

Trinseo Plc (TSEOF) had a net profit margin of -18.3% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.

Does Trinseo Plc pay dividends?

Yes, Trinseo Plc (TSEOF) paid $0.02 per share in dividends during fiscal year 2025.

What is Trinseo Plc's free cash flow?

Trinseo Plc (TSEOF) generated -$153.4M in free cash flow during fiscal year 2025. This represents a -97.9% 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 Trinseo Plc's operating cash flow?

Trinseo Plc (TSEOF) generated -$102.4M in operating cash flow during fiscal year 2025, representing cash generated from core business activities.

What are Trinseo Plc's total assets?

Trinseo Plc (TSEOF) had $2.3B in total assets as of fiscal year 2025, including both current and long-term assets.

What are Trinseo Plc's capital expenditures?

Trinseo Plc (TSEOF) invested $51.0M in capital expenditures during fiscal year 2025, funding long-term assets and infrastructure.

How many shares does Trinseo Plc have outstanding?

Trinseo Plc (TSEOF) had 36M shares outstanding as of fiscal year 2025.

What is Trinseo Plc's current ratio?

Trinseo Plc (TSEOF) had a current ratio of 1.21 as of fiscal year 2025, which is considered adequate.

What is Trinseo Plc's debt-to-equity ratio?

Trinseo Plc (TSEOF) had a debt-to-equity ratio of -2.12 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.

What is Trinseo Plc's return on assets (ROA)?

Trinseo Plc (TSEOF) had a return on assets of -23.9% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.

What is Trinseo Plc's cash runway?

Based on fiscal year 2025 data, Trinseo Plc (TSEOF) had $146.7M in cash against an annual operating cash burn of $102.4M. This gives an estimated cash runway of approximately 17 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.

Why is Trinseo Plc's debt-to-equity ratio negative or unusual?

Trinseo Plc (TSEOF) has negative shareholder equity of -$1.1B as of fiscal year 2025, which causes the debt-to-equity ratio to appear negative or not meaningful. This can occur when accumulated losses exceed invested capital, or after large share buyback programs. Other solvency metrics like the current ratio or interest coverage may be more informative.

What is Trinseo Plc's Altman Z-Score?

Trinseo Plc (TSEOF) has an Altman Z-Score of 0.19, 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 Trinseo Plc's Piotroski F-Score?

Trinseo Plc (TSEOF) has a Piotroski F-Score of 1 out of 9, indicating weak financial health. 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 Trinseo Plc's earnings high quality?

Trinseo Plc (TSEOF) has an earnings quality ratio of 0.19x, 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.