Question

For the past year, Kayla, Inc., has sales of $45,797, interest expense of $3,620, cost of goods sold of $16,134, selling and administrative expense of $11,481, and depreciation of $5,980. If the tax rate is 35 percent, what is the operating cash flow? the majority of firms in the u.s. are structured as corporations,

Answer 1

Answer:

$15,178

Explanation:

Given that;

Sales = $45,797

Costs of goods sold = $16,134

S&A expenses = $11,481

EBITDA = Sales - cost of goods sold - S&A

= $45,797 - $16,134 - $11,481

= $18,182

Depreciation = $5,980

EBIT = EBITDA - Depreciation

= $18,182 - $5,980

= $12,202

Interest expense = $3,620

EBT = EBIT - Interest expense

= $12,202 - $3,620

= $8,582

Less tax at 35% $3,004

Net income = $5,578

Operating cash flow = EBIT + depreciation - tax

= $12,202 + $5,980 - $3,004

= $15,178