Your firm has the following income statement items: sales of $50,250,000; income tax of $1744000; operating expenses of $8750000; cost of goods sold of $35025000; depreciation and amortization of $1365000; and interest expense of $750000. What is the amount of the firm's after tax cash flow?
Solution: | ||
Firm's after tax cash flow | 4,731,000 | |
Working Notes: | ||
Computation of after tax cash flow | ||
A | Sales | 50,250,000 |
B | Less: Cost of goods sold | 35025000 |
C | Less: operating expenses | 8,750,000 |
D | Less: Depreciation and amortization | $1,365,000 |
E=A-B-C-D | Profit Before Tax | $5,110,000 |
F | Less: income tax | 1744000 |
G=E-F | Net Income | $3,366,000 |
H | Add: Depreciation and amortization | 1,365,000 |
I=G + H | Operating Cash Flow | 4,731,000 |
(after tax cash flow) | ||
after tax cash flow (operating cash flow) | ||
= Net income + Depreciation | ||
Please feel free to ask if anything about above solution in comment section of the question. |
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