Company ABC has EBIT = € 11158, depreciation expense = € 2200, interest expense= € 4500...

Question

Question

Company ABC has EBIT = € 11158, depreciation expense = € 2200, interest expense= € 4500 and the tax rate 35%.

What is the operating cash flow?

Answer 1

Answer #1

Sol :

Company ABC EBIT = €11158

Depreciation expense = €2200

Interest expense = €4500

Tax rate = 35%

Net income = EBIT - Depreciation expense - Interest expense - Tax rate

Net income = €11158 - €2200 - €4500 - 35% of €11158 (EBIT) = €3905.3

Net income = €552.7

Operating cash flow = Net Income + Non-Cash Expenses

Operating cash flow = €552.7 + €2200 (depreciation) = €2752.7

Therefore operating cash flow for ABC company will be €2752.7

Answer 2

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