What is the formula for computing operating cash flow?
A)EBIT + Depreciation − Current taxes
B)EBIT + Depreciation − Interest expense − Current taxes
C)EBIT + NWC − Depreciation
D)EBIT − Depreciation + Current taxes
E)EBIT − Change in NWC + Depreciation − Current taxes

Question

Quizplus · Accepted Answer

Operating cash flow is calculated as EBIT (Earnings Before Interest and Taxes) plus Depreciation minus Current taxes. This formula accounts for the company's earnings before the impact of interest and taxes, adds back non-cash depreciation expenses, and subtracts taxes paid, providing a measure of the cash generated from the company's operations.

What Is the Formula for Computing Operating Cash Flow