NARRBEGIN: Cold Weather Sports
Cold Weather Sports,Inc.(CWS)
Cold Weather Sports,Inc.(CWS)just completed its 2012 fiscal year.During the year,CWS had sales of $10,000 and total expenses (no interest expenses were incurred)of $6,000.Assume that CWS pays 30% of its EBIT in taxes and that depreciation expense of $1,200 is included in the total expense number listed above.A list of some balance sheet items for CWS for end of fiscal year 2011 and 2012 is as below.
No fixed assets were disposed of during the year.
-What is Cold Weather Sports' operating cash flow for 2012?

Question

NARRBEGIN: Cold Weather Sports
Cold Weather Sports,Inc.(CWS)
Cold Weather Sports,Inc.(CWS)just completed its 2012 fiscal year.During the year,CWS had sales of $10,000 and total expenses (no interest expenses were incurred)of $6,000.Assume that CWS pays 30% of its EBIT in taxes and that depreciation expense of $1,200 is included in the total expense number listed above.A list of some balance sheet items for CWS for end of fiscal year 2011 and 2012 is as below.
   No fixed assets were disposed of during the year.
-What is Cold Weather Sports' operating cash flow for 2012?

Quizplus · Accepted Answer

10,000 sales - 6,000 expense = 4,000 EBIT
4,000 EBIT - 1,200 tax + 1,200 depreciation expense = 4,000