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?