Your firm has the following income statement items: sales of $50,250,000;income tax of $1,744,000;operating expenses of $8,750,000;cost of goods sold of $35,025,000;depreciation and amortization of $1,365,000;and interest expense of $750,000.For purposes of determining free cash flow,what is the amount of the firm's after-tax cash flow from operations?
A)$255,223
B)$4,731,000
C)$2,385,000
D)$7,775,000

Question

Quizplus · Accepted Answer

After-tax cash flow from operations is calculated as Net Income + Depreciation and Amortization. Net Income is calculated as Sales - COGS - Operating Expenses - Depreciation and Amortization - Interest Expense - Income Tax. This results in $3,366,000. Adding back Depreciation and Amortization of $1,365,000 gives $4,731,000.

Your Firm Has the Following Income Statement Items: Sales of $50,250,000;income