Computation of operating cash flows

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Reference no: EM1314204

Nabors Inc.
2005 and 2006 Balance Sheet
($ in millions)
	2005	2006
Cash	$310	$405
Accounts rec	2,640	3,055
Inventory	3,275	3,850
Total	$6,225	$7,310
Net fixed assets	10,960	10,670
Total assets	$17,185	$17,980

Accounts payable	$2,720	$2,570
Notes payable	100	0
Total	$2,820	$2,570
Long term debt	7,875	8,100
Common stock	5,000	5,250
Retained earnings	1,490	2,060
Total liab. & equity	$17,185	$17,980

Nabors Inc.
2006 Income Statement
($ in millions)
Net sales	$9,610
Less: Cost of goods sold	6,310
Less: Depreciation	1,370
Earnings before interest and tax	1,930
Less: Interest paid	630
Taxable income	$1,300
Less: Taxes	455
Net income	$845

What is the operating cash flow for 2006?

A. $845
B. $1,930
C. $2,215
D. $2,845
E. $3,060

Reference no: EM1314204

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