7
1
watching
987
views

# Benson Inc has sales of \$39580 costs of \$13020, depreciation expense of \$2670, and interest expense of \$1940. The tax rate is 23 percent. What is the operating cash flow?

Step-by-step explanation:

Operational cash flow

Sales.               =\$39580

-cost.               =\$13020

-depreciation. =\$2670

Operating income=\$23890

-interest expense=\$1940

income before tax=\$21950

-tax=23%=0.23*21950=\$5048.5

Tax income=\$16901.5

Operational cash flow=Net income+non-cash expenses-increase in working capital

Operating cash Flow=\$16901.5+\$2670-0

Operating Cash flow=\$19571.5

\$19,571.50

Step-by-step explanation:
Operating cash flow generated by the company from its operations, in other words, the number of cash resources derived from operating activities, which is the total cash flow that would be shown under the operating activities section of the cash flow statement.

operating cash flow=net income+depreciation

The depreciation would be added back to the net income in a bid to determine the operating cash flow since it is a non-cash charge

Earnings before tax=sales-costs-depreciation-interest expense

Earnings before tax=\$39580-\$13,020-\$2670-\$1940

Earnings before tax=\$21,950

Net income=earnings before tax*(1-tax rate)

tax rate =23%

net income=\$21950*(1-23%)

net income=\$16,901.50

depreciation=\$2670

operating cash flow=\$16,901.50+\$2670

operating cash flow=

\$19,571.50 Operating Cash flow is \$19,440

Explanation:

Operating Cash flow

Sales                         = \$38,530

-Costs                        = \$12,750

-Depreciation            = \$2,550

Operating Income    = \$23,230

-Interest Expense     = \$1,850

Income before Tax  = \$21,380

-Tax                           = \$4,490

Net Income               = \$16,890

Operating Cash Flow = Net Income + Non-Cash Expenses – Increase in Working Capital

Operating Cash flow = \$16,890 + \$2,550 - 0

Operating Cash flow = \$19,440

21,511.5

Step-by-step explanation:

Sales = \$ 39,580

Less: Cost = \$ 13,020

EBIDT = \$ 26,560

less: Depreciation = \$ 2,670

EBIT = \$ 23,890

less: Interest = \$ 1,940

EBT = \$ 21,950

less: Taxes = \$ 5,048.5 ( \$ 21,950 * 23%)

Net Income = \$ 16,901.50

Operating cash flow (OCF) = EBIT + depreciation - taxes

= \$ 23,890 + \$ 2,670 - \$ 5,048.5

= \$ 21,511.5 Step-by-step explanation:
Based on indirect method of calculation, operating cash flow is net income adjusted for non-cash items like depreciation, AR and AP.

Profit before tax = Sales - costs - depreciation - interest = 39,580 - 13,020 - 2,670 - 1,940 = 21,950

Net Income = Profit before tax - tax = 21,950 - 23%*21,950 = 16,901.5

Operating cash flow = Net income + depreciation = 16,901.5 + 2,670 = 19,571.5 Operating Cash flow=\$19571.5
Step-by-step explanation:
Operational cash flow

Sales.               =\$39580

-cost.               =\$13020

-depreciation. =\$2670

Operating income=\$23890

-interest expense=\$1940

income before tax=\$21950

-tax=23%=0.23*21950=\$5048.5

Tax income=\$16901.5

Operational cash flow=Net income+non-cash expenses-increase in working capital

Operating cash Flow=\$16901.5+\$2670-0

Operating Cash flow=\$19571.5