Question

Hailey, inc., has sales of $19,630, costs of $9,400, depreciation expense of $2,070, and interest expense of $1,560. assume the tax rate is 30 percent. what is the operating cash flow, or ocf

Answer 1

Sales = 19,630

Costs = 9,400

Gross Profit = 10,230

Depreciation = 2,070

Interest expense = 1,560

Earnings before tax = 6,600

Taxes at 30% = 1,980

Net Income =  4,620

Add back Depreciation = 2,070 (as it is an non cash expense)

Operating cash flow (OCF) = $ 6,690