Cash conversion efficiency appears strained, evidenced by an operating cash flow to net income ratio of negative 0.53 in 2026Q1 and highly variable free cash flow margins.
| Metric | TTM | Jan'26 | Dec'24 | Dec'23 | Dec'22 | Jan'22 | Jan'21 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Cash from Operations | 1.16B | 1.27B | 1.27B | 1.27B | 1.6B | 768M | 1.01B | 1.11B | 936M | 1.01B | 1.09B | 1.21B | 810M | 927M | 1.06B | 984M | 1.01B | 750M | 1.05B | 969M | 1.04B | 1.04B | 949M | 848M | 694M | 983M | 1.02B | 1.12B | 961M | 1.06B | 1.56B |
| Operating CF Margin % | - | 8.57% | 9.24% | 9.25% | 12.42% | 6.2% | 8.7% | 8.12% | 6.7% | 7.13% | 7.91% | 9% | 5.84% | 7.66% | 8.69% | 8.73% | 9.64% | 7.14% | 7.49% | 7.68% | 9.02% | 10.32% | 11.41% | 8.66% | 6.71% | 7.98% | 7.82% | 9.41% | 9.73% | 12.24% | 20.84% |
| Operating CF Growth % | 37.71% | 0.16% | 0% | -20.78% | 108.07% | -24.26% | -8.4% | 18.27% | -7.51% | -7.16% | -9.77% | 49.14% | -12.62% | -12.79% | 8.03% | -3.05% | 35.33% | -28.5% | 8.26% | -6.47% | 0% | 9.17% | 11.91% | 22.19% | -29.4% | -3.91% | -8.33% | 16.13% | -9.6% | -32.03% | 21.81% |
| Net Income | 934M | 1.6B | 922M | 922M | 747M | 309M | 815M | 1.22B | 306M | 843M | 698M | 605M | 498M | 581M | 242M | 92M | -73M | 344M | 915M | 706M | 516M | 516M | 373M | 281M | 364M | 166M | 277M | 2.27B | 608M | 558M | 253M |
| Depreciation & Amortization | 409M | 391M | 392M | 395M | 376M | 379M | 405M | 424M | 431M | 434M | 444M | 441M | 372M | 355M | 368M | 360M | 369M | 358M | 336M | 290M | 303M | 303M | 353M | 356M | 368M | 514M | 494M | 440M | 361M | 435M | 387M |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | -2M | -18M | -192M | -192M | 23M | -7M | 89M | 49M | 346M | 48M | 4M | -19M | 86M | 171M | 81M | 69M | -265M | -43M | -13M | 37M | 17M | 17M | 29M | -41M | 330M | 96M | 9M | 63M | -16M | 76M | 11M |
| Other Non-Cash Items | -1.41B | -589M | 431M | 179M | 97M | 206M | 103M | -283M | 126M | 145M | 119M | 115M | 75M | 106M | 571M | 415M | 663M | 831M | 96M | 8M | 233M | 233M | 191M | 254M | 263M | 139M | 513M | -1.62B | 84M | 190M | 1.27B |
| Working Capital Changes | 554M | -121M | -287M | -38M | 355M | -119M | -398M | -305M | -273M | -458M | -175M | 66M | -221M | -286M | -199M | 48M | 321M | -740M | -285M | -72M | -33M | -33M | 3M | -2M | -631M | 68M | -270M | -33M | -76M | -196M | -358M |
| Change in Receivables | 26M | 66M | -97M | -26M | 73M | 60M | 144M | 72M | -169M | 42M | -14M | 56M | -118M | 32M | 36M | -1M | 17M | 16M | -42M | -14M | -87M | -87M | -146M | 87M | -180M | -102M | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | -370M | -447M | -194M | -359M | 45M | 434M | -292M | 41M | 412M | -352M | -239M | -209M | -118M | -316M | -127M | -10M | 803M | -671M | -490M | -427M | -188M | -188M | -222M | 172M | 120M | 103M | 5M | 13M | -157M | -89M | -33M |
| Change in Payables | 188M | 141M | -69M | 2M | 13M | -613M | 280M | -63M | -156M | 215M | 43M | -228M | 65M | 179M | 211M | 54M | -535M | 274M | 52M | 115M | 173M | 173M | 5M | -199M | -162M | 166M | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -392M | -351M | -317M | -317M | -281M | -248M | -266M | 620M | -645M | -523M | -388M | -1.92B | -264M | 378M | 843M | 1.55B | 1.94B | 63M | -1.41B | -1.41B | -1.2B | -1.2B | -812M | 58M | -601M | -320M | -922M | 43M | -1.64B | -376M | -1.58B |
| Capital Expenditures | -451M | -384M | -402M | -402M | -375M | -317M | -339M | -369M | -423M | -446M | -420M | -429M | -444M | -480M | -423M | -270M | -238M | -550M | -401M | -431M | -365M | -365M | -302M | -301M | -296M | -532M | -527M | -2.11B | -1.43B | -412M | -343M |
| CapEx % of Revenue | 2.97% | 2.59% | 2.93% | 2.94% | 2.91% | 2.56% | 2.91% | 2.71% | 3.03% | 3.14% | 3.05% | 3.2% | 3.2% | 3.97% | 3.46% | 2.39% | 2.26% | 5.24% | 2.86% | 3.42% | 3.18% | 3.63% | 3.63% | 3.07% | 2.86% | 4.32% | 4.03% | 17.77% | 14.49% | 4.74% | 4.57% |
| Acquisitions | -13M | -10M | 17M | -1M | 41M | 18M | -2M | 784M | -331M | -186M | -81M | -1.63B | -196M | 122M | 95M | 72M | 236M | -100M | -1.1B | -487M | -24M | -24M | 22M | 14M | -2M | 12M | -85M | 0 | 0 | 549M | 180M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 72M | 43M | 68M | 86M | 53M | 51M | 75M | 205M | 109M | 109M | 113M | 138M | 376M | 736M | 1.17B | 1.75B | 1.94B | 813M | 92M | -491M | -806M | -806M | -570M | -87M | -226M | -582M | -176M | 2.15B | -211M | -168M | -1.2B |
| Cash from Financing | -806M | -1.25B | -813M | -813M | -1.45B | 360M | -502M | -1.86B | -360M | -168M | -504M | 335M | -742M | -781M | -1.95B | -3.49B | -1.63B | -790M | 87M | 401M | 283M | 283M | -276M | -748M | -46M | -692M | -21M | -1B | 691M | -647M | -17M |
| Debt Issued (Net) | 133M | -375M | 304M | 304M | -621M | 544M | -2M | -131M | 195M | 68M | -295M | 663M | -823M | -511M | -1.88B | -3.48B | -1.53B | -243M | 418M | 1.2B | 950M | 950M | 87M | -521M | 442M | -488M | 507M | -110M | 1.48B | -451M | -239M |
| Equity Issued (Net) | -739M | -993M | -1.09B | -1.09B | -805M | -161M | -479M | -1.71B | -530M | -205M | -187M | -290M | 106M | -272M | -30M | 6M | 333M | -493M | -201M | -588M | -491M | -491M | -228M | 3M | -224M | -47M | -353M | -701M | -641M | -290M | -258M |
| Dividends Paid | -18M | -19M | -16M | -16M | -18M | -18M | -18M | -20M | -21M | -22M | -22M | -28M | -22M | -17M | -22M | -22M | -21M | -284M | -154M | -244M | -189M | -189M | -135M | -222M | -182M | -184M | -189M | -192M | -143M | -202M | -148M |
| Share Repurchases | -928M | -1.08B | -1.17B | -1.17B | -921M | -183M | -503M | -1.78B | -582M | -241M | -219M | -340M | 0 | -272M | -30M | 0 | 0 | -533M | -304M | -761M | -597M | -597M | -415M | -64M | -248M | -47M | -353M | -751M | -712M | -328M | -300M |
| Other Financing | -182M | 137M | -6M | -6M | -2M | -5M | -3M | -4M | -4M | -9M | 0 | -10M | -3M | 19M | -20M | 0 | -412M | 230M | 24M | 33M | 13M | 13M | 0 | -8M | -82M | 27M | 14M | 0 | 0 | 0 | 483M |
| Net Change in Cash | -31M | -331M | 146M | 146M | -137M | 897M | 250M | -155M | -36M | 293M | 183M | -389M | -202M | 528M | -46M | -961M | 1.34B | 16M | -249M | -16M | 796M | 796M | 0 | 536M | 47M | -29M | 80M | 156M | 10M | 40M | -37M |
| Free Cash Flow | 707M | 884M | 864M | 864M | 1.22B | 451M | 675M | 738M | 513M | 566M | 670M | 779M | 366M | 447M | 640M | 714M | 777M | 200M | 648M | 538M | 671M | 671M | 647M | 547M | 398M | 451M | 496M | -990M | -470M | 651M | 1.22B |
| FCF Margin % | 4.66% | 5.97% | 6.31% | 6.31% | 9.5% | 3.64% | 5.79% | 5.41% | 3.67% | 3.99% | 4.86% | 5.8% | 2.64% | 3.69% | 5.23% | 6.33% | 7.38% | 1.9% | 4.63% | 4.26% | 5.84% | 6.68% | 7.78% | 5.59% | 3.85% | 3.66% | 3.79% | -8.35% | -4.76% | 7.5% | 16.27% |
| FCF Growth % | 21.27% | 2.31% | 0% | -29.35% | 171.18% | -33.19% | -8.54% | 43.86% | -9.36% | -15.52% | -13.99% | 112.84% | -18.12% | -30.16% | -10.36% | -8.11% | 288.5% | -69.14% | 20.45% | -19.82% | 0% | 3.71% | 18.28% | 37.44% | -11.75% | -9.07% | 150.1% | -110.64% | -172.2% | -46.68% | 21.98% |
| FCF per Share | 4.01 | 4.90 | 4.54 | 4.28 | 5.69 | 2.08 | 2.98 | 3.24 | 2.03 | 2.11 | 2.46 | 2.79 | 1.30 | 1.57 | 2.17 | 2.32 | 2.57 | 0.76 | 2.59 | 2.11 | 2.58 | 2.46 | 2.31 | 1.99 | 1.42 | 1.58 | 1.70 | -3.20 | -1.41 | 1.92 | 3.56 |
| FCF Conversion (FCF/Net Income) | 0.76x | 1.38x | 1.54x | 1.37x | 1.86x | 1.03x | 3.28x | 1.36x | 0.77x | 3.30x | 1.13x | 1.73x | 1.35x | 1.86x | 1.80x | 4.07x | 11.80x | -24.19x | 2.16x | 1.06x | 1.72x | 5.10x | 2.60x | 3.27x | -5.60x | 5.92x | 4.69x | 0.50x | 1.58x | 1.91x | 6.18x |
| Interest Paid | 0 | 0 | 142M | 122M | 123M | 145M | 0 | 0 | 0 | 162M | 164M | 157M | 175M | -170M | 199M | 0 | 272M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 191M | 352M | 356M | 93M | 0 | 0 | 0 | 48M | 174M | 198M | 289M | 223M | 43M | 0 | 160M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Working capital volatility
As reported in financial statements, Textron's operating cash flow to net income ratio has exhibited extreme volatility, ranging from a negative 0.53 in 2026Q1 to a high of 3.89 in 2024Q4, suggesting that reported earnings are frequently decoupled from actual cash generation capabilities.
The significant variance between net income and operating cash flow indicates that accrual-based accounting adjustments, likely tied to long-term contract milestones, heavily influence the company's reported profitability. Investors should monitor whether this divergence is a temporary timing issue or a structural feature of the company's defense-heavy revenue recognition model.
Based on recent SEC filings, Textron's free cash flow margins have fluctuated wildly between a negative 6.8% in 2026Q1 and a positive 12.6% in 2025Q4, highlighting the inherent difficulty in maintaining consistent cash flow generation across its cyclical aerospace and industrial business segments.
The inability to sustain positive free cash flow in multiple quarters suggests that the company's capital requirements often outpace its operational cash inflows. This inconsistency warrants further investigation into whether the current cost structure is sufficiently flexible to withstand periods of lower demand in the aviation market.
According to the provided quarterly data, working capital changes have been a primary driver of cash flow variance, with a massive $698 million inflow in 2025Q4 contrasting sharply with a $447 million outflow in 2025Q1, indicating significant sensitivity to inventory and receivable management cycles.
The dramatic swings in working capital suggest that the company's cash position is highly dependent on the timing of large defense contract payments and inventory build-ups. Such volatility implies that management may have limited control over short-term cash availability, making quarterly cash flow projections inherently unreliable.
As evidenced by the company's financial disclosures, Textron has consistently prioritized share repurchases, spending as much as $377 million in 2024Q1, even during periods where operating cash flow was insufficient to cover these outflows, suggesting a management preference for returning capital over maintaining cash reserves.
The decision to maintain high levels of share buybacks despite inconsistent cash flow generation may indicate a high degree of confidence in long-term defense prospects. However, this strategy appears to leave the company with little margin for error should operational cash flow remain under pressure in future quarters.
Quick answers to the most common questions about buying TXT stock.
Textron Inc. (TXT) generated $1.27B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Textron Inc. (TXT) generated $884.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Textron Inc. (TXT) spent $384.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Textron Inc. (TXT) returned $19.0M to shareholders via cash dividends and spent $1.08B on share repurchases. This shows the company's commitment to returning capital to its equity investors.