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Homework answers / question archive / Disturbed, Inc
Disturbed, Inc., had the following operating results for the past year: sales = $22,619; depreciation = $1,400; interest expense = $1,128; costs = $16,535. The tax rate for the year was 38 percent. What was the company's operating cash flow?
Sales= $22,619
Costs=$16,535
Depreciation =$1,400
Interest expense =$1,128
Tax rate=38%
Earnings before interest and tax (EBIT) = Sales -Costs - Depreciation
= 22619- 16535- 1400
= 4684
Taxes= (EBIT - Interest expenses)* tax rate
= (4684- 1128)* 38%
= 1351.28
Operating cash flow = EBIT - Taxes + Depreciation
= 4684- 1351.28+ 1400
= 4732.72
