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stranahan stranahan
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6 years ago
Operating Cash Flow (OCF) = EBIT + Depreciation + Taxes.
A) True
B) False
Textbook 
Financial Management: Core Concepts

Financial Management: Core Concepts


Edition: 2nd
Author:
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clockfitnessclockfitness
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More solutions for this book are available here
We first compute EBIT, which is Revenues - Costs of Goods Sold - General Selling and Administrative Expenses - Depreciation. We then subtract out Interest Expense to get Taxable Income.We then subtract out Taxes to get Modified Net Income. We now add back Depreciation to get Operating Cash Flow. Thus OCF = EBIT + Depreciation - Taxes.
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stranahan Author
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#2
6 years ago
Thanks Smiling Face with Open Mouth and Tightly-closed Eyes
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