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    Buffett-Greenwald Free Cash Flow Architecture

    Warren Buffett Owner's Earnings

    Decomposing capital expenditures into maintenance and growth to reveal true cash-flow power.

    Select United States (S&P 500 / NASDAQ) Preset:Capital Intensity: MODERATE

    Cash Flow & CapEx (M)

    AAPL
    Operating Cash Flow (OCF):$ 118,000M
    Total Capital Expenditures (CapEx):$ 11,000M
    Gross PP&E (Property, Plant, Equip):$ 114,000M
    Current Year Revenue:$ 385,000M
    Prior Year Revenue:$ 360,000M
    Current Share Price:$ 225.00
    Buffett Owner's Earnings
    $ 114,402.6M
    Standard Free Cash Flow: $ 107,000M
    HIGH GROWTH COMPOUNDER
    3.4% Yield
    CapEx Breakdown (Bruce Greenwald):Maintenance: 33% | Growth: 67%
    Maintenance: $ 3,597.4MGrowth: $ 7,402.6M
    Superb capital allocation. The majority of CapEx drives accretive top-line revenue expansion rather than merely defending obsolete physical assets.
    P / Owner's Earnings:
    29.9x
    P / Standard FCF:
    32.0x
    Buffett Alpha / Share:
    +$ 0.49

    Owner's Earnings Per Share vs Standard FCF

    Owner's Earnings / Share:
    $ 7.53
    Includes growth CapEx add-back
    Standard FCF / Share:
    $ 7.04
    Penalizes all CapEx as expense

    Methodological Reference: Buffett 1986 Shareholder Letter

    Standard GAAP accounting and Wall Street models subtract 100% of capital expenditures to calculate Free Cash Flow. However, fast-growing compounders that deploy massive capital into expanding store counts, server farms, or fiber networks are artificially penalized. By isolating true Maintenance CapEx via Professor Bruce Greenwald's PPE-to-sales capacity model, we reveal the true underlying cash distribution power of the enterprise.