Net Income and OCF.
During 2007, Belyk Paving Co. had sales of $3,100,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $1,940,000, $475,000 and $530,000, respectively. In addition, the company had an interest expense of $210,000 and a tax rate of 35 percent. (Ignore any tax loss carry back or carry forward provisions).
a. What is Belyk’s net income for 2007?
b. What is the operating cash flow?
c. Explain your results in (a) and (b).