Question

Your firm has the following income statement items: sales of $50,250,000; income tax of $1744000; operating expenses of $8750000; cost of goods sold of $35025000; depreciation and amortization of $1365000; and interest expense of $750000. What is the amount of the firm's after tax cash flow?

Answer 1

Solution:
	Firm's after tax cash flow	4,731,000
Working Notes:
	Computation of after tax cash flow
A	Sales	50,250,000
B	Less: Cost of goods sold	35025000
C	Less: operating expenses	8,750,000
D	Less: Depreciation and amortization	$1,365,000
E=A-B-C-D	Profit Before Tax	$5,110,000
F	Less: income tax	1744000
G=E-F	Net Income	$3,366,000
H	Add: Depreciation and amortization	1,365,000
I=G + H	Operating Cash Flow	4,731,000
	(after tax cash flow)
	after tax cash flow (operating cash flow)
	= Net income + Depreciation
Please feel free to ask if anything about above solution in comment section of the question.