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Hammett, Inc., has sales of $69,543, costs of $34,857, depreciation expense of $14,381, and interest expense...

Hammett, Inc., has sales of $69,543, costs of $34,857, depreciation expense of $14,381, and interest expense of $3,504. If the tax rate is 25 percent, what is the operating cash flow, or OCF?

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Answer #1

Sales = $69,543

Costs = ($34,857)

Depreciation expense = ($14,381)

EBIT = $20,305

Less: Interest = ($3,504)

EBT = $16,801

Less: tax = ($4,200.25)

Net Income = $12,600.75

Operating Cash Flow = EBIT + Depreciation -taxes

OCF = $20,305 + $14,381 - $4,200.25

OCF = $30,485.75

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