Operating cash flow is the cash the business actually brought in from trading, after paying staff, suppliers and tax. Some of it has to go straight back in as capex — capital expenditure on the machines, stores, networks and software that wear out or need replacing. What's left is free cash flow: cash the company can use to pay dividends, buy back shares or pay down debt without borrowing to do it.
It's the honest number because it's much harder to flatter than profit: a sale that's been booked but not yet paid for adds to profit, not to cash. A dividend that's regularly bigger than free cash flow is being paid from somewhere else — savings, asset sales or new debt. The Cash Flow figure in a holding's detail divides operating cash flow by dividends paid, using the latest annual report. It's measured before capex, so for a business that spends heavily on upkeep, the real cushion is smaller than it looks.
The dividend has to come out of the last box, or it's coming from somewhere else.
Educational content only. It is not personal financial advice.