Dixie's sales for the year were $1,678,000.Cost of goods sold, administrative and selling expenses, and depreciation expenses were $1,141,000, $304,000, and $143,000, respectively.In addition, the company had an interest expense of $74,000 and a tax rate of 34 percent.What is the operating cash flow for the year?

Question

Quizplus · Accepted Answer

Operating cash flow = EBIT + Depreciation - TaxesEBIT = Sales - COGS - Administrative and selling expensesEBIT = $1,678,000 - $1,141,000 - $304,000 = $233,000Operating cash flow = $233,000 + $143,000 - ($233,000 x 0.34) = $227,560

Dixie's Sales for the Year Were $1,678,000