To find operating cash flow for the business for the year,add depreciation expense to EBIT and then ________.
A)subtract the interest expenses
B)add the taxes
C)subtract the taxes
D)add interest expenses

Question

Quizplus · Accepted Answer

To find operating cash flow, we add back depreciation to EBIT (earnings before interest and taxes) because it is a non-cash expense, and then we subtract taxes because taxes are a cash expense. Interest expenses are not directly related to operating cash flow, and therefore, are not included in this calculation.

To Find Operating Cash Flow for the Business for the Year,add