Question

Jetson Spacecraft Corp. shows the following information on its 2019 income statement: sales = $214,000; costs = $91,000; other expenses = $6,100; depreciation expense = $9,100; interest expense = $13,300; taxes = $37,800; dividends = $10,100. In addition, you're told that the firm issued $7,900 in new equity during 2009 and redeemed $9,500 in outstanding long-term debt. What is the 2019 operating cash flow? Hint: OCF = EBIT + Depreciation - Taxes.

Answer 1

Answer:

$79,100

Explanation:

The computation of operating cash flow is shown below:-

EBIT = Sales - costs - other expenses - depreciation expense

= $214,000 - $91,000 - $6,100 - $9,100

= $107,800

Operating cash flow = EBIT + Depreciation expense - Taxes

= $107,800 + $9,100 - $37,800

= $79,100

Therefore for computing the operating cash flow we simply applied the above formula.