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How much net cash flow did Company A generate over the past year?


Company A had net sales of $90,000 over the past year. It's operating costs (excluding depreciation) were $65,000, and its depreciation expense was $7,000. The company has no amortization charges, but it does have $30,000 worth of debt at a 10% annual interest rate. If the firm's rate is 40%, how much net cash flow did Company A generate over the past year?

538 day(s) ago

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Answers (1)

EchoMan 		Let's see
Sales of 90,000
Operating Costs of 65,000
Interest 3,000 (30,000 debt x 10%)
Net Cash of 22,000
Assuming that the rate refers to the tax rate of 40% then tax expense is 8800 (22,000 x 40%) so
net cash flow is 13,200
Depreciation is ignored since it is a non cash expense

Posted 538 days ago

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Question Title How much net cash flow did Company A generate over the past year?
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