Profitability vs. Reality: EBITDA, OCF, and FCF
Nov 22, 2025EBITDA, operating cashflow, and free cashflow are three different answers to one question: what is the business really producing?
Move from earnings power to cash conversion to cash left after reinvestment.
The move
EBITDA shows operating earnings before key adjustments. Operating cashflow shows cash generated by operations. Free cashflow shows what remains after capital expenditure.
Each layer removes a different illusion.
The reality check
If EBITDA is strong but OCF is weak, working capital may be eating the business. If OCF is strong but FCF is weak, capex may be the real cost of staying competitive.
Use it
Ask where the money disappears between EBITDA and FCF. The disappearance is often the business model talking.
Company strategy, founder logic, finance, and operating moves in short case notes.