Earnings before interest and taxes

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Reference no: EM13949760

If Earnings Before Interest and Taxes (EBIT) is $93,000, calculate Operating Cash Flow if

Sales is $350,000
Cost of Goods Sold (COGS) is $140,000
Fixed costs is $43,000
Selling, General, Administrative Expenses (SGA) are $28,000
Depreciation is $46,000
Interest Expense is $18,000
Tax rate is 40%

The formula for Operating Cash Flow is:

EBIT+Depreciation - Taxes = Operating Cash Flow

(93,000+46,000) - .4(x)

This is how I see the formula in my eyes but I'm not sure what is being taxed. The sales? The EBIT? COGS?

Reference no: EM13949760

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