Answer:
We can't define the firm's net income without additional information as either (1) or (2):
1) Revenues/ all income, and all expenses
2) Operating cash-flow together with interest expense, and tax rate
Explanation:
If we can have the operating cash-flow, then we can define EBIT (profit/ earnings before tax and interest) as below:
Operating cash-flow = EBIT + depreciation - increase of accounts receivable and inventories + increase of accounts payable.
Assuming Operating cash-flow is $100,000 then we have:
EBIT = $100,000 + $64,000 - $85,000 + $14,000 = $93,000
Assuming the firm have no interest expense and tax rate is 35%, then net profit = EBIT*(1- tax rate) = $93,000 * (1-35%) = $60,450
