15 A firm's operating cash flow (OCF) is defined asgross profit minus depreciation.O gross profit minus operating expenses.EBIT times one minus the tax rate plus depreciation.O EBIT plus depreciation.

Operating cash flows are the transactions which are directly related to the purchase and sale of the…

Answered: operating cash flow (OCF) i=

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter2: Financial Statements, Cash Flow, And Taxes

Section2.3: The Income Statement

Problem 5ST

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Similar questions

In computing the periods net operating cash flows, why are noncash expenses added back to net income?
The IRR method assumes that cash flows are reinvested at _________. A. the internal rate of return B. the companys discount rate C. the lower of the companys discount rate or Internal rate of return D. an average of the internal rate of return and the discount rate
A firm's operating cash flow (OCF) is defined as ________. a. EBIT plus depreciation b. gross profit minus operating expenses c. gross profit minus depreciation d. EBIT times one minus the tax rate plus depreciation
In a construction cash flow statement which of the following working capital account represents a source of cash of the firm? Decrease in Accounts Receivable. Increase in Accounts Receivable. Decrease in Accounts Payable. Decrease in accrued Taxes Payable.
In a construction cash flow statement which of the following workingcapital account represents a source of cash of the firm? A. Decrease in Accounts Receivable.B. Increase in Accounts Receivable.C. Decrease in Accounts Payable.D. Decrease in accrued Taxes Payable.
Companies that show a profit on their income statement for the period will always show a positive cash flow from operating activities on its Cash Flow Statement for that period. true or false
. If a company reports positive net income for the year, can it also show a net cash outflow from operating activities? Explain.. Is depreciation a source of cash flow? explain
Compute the company’s free cash flow to equity using the residual income model
Why is the income statement an important input for a company’s balance sheet and statement of cash flows? A : The income statement is used to calculate earnings before interest and taxes. B : The income statement shows the depreciated and amortized expenses. C : The income statement shows the value of long-term asset and liabilities. D : The income statement calculates the firm’s net income and is used for earnings.
The operating-cash-flow-to-current-liabilities ratio is computed by dividing a firm's a net cash flow from operating activities by: A) Current liabilities at the beginning of the period B) Current liabilities at the end of the period C) Total liabilities at the middle of the period D) Average current liabilities for the period
How is it the operating Cash flow is positive if Earnings Before Interest and Tax is a negative figure if the formula is EBIT+Depreciation -Tax. kindly explain that calculation for operating Cash Flow
Which one of the following is a principal function of the statement of cash flows? a. To predict the ability to pay debts and dividends b. To evaluate the level of debt and leverage of a company c. To calculate the turnover of inventory d. To predict future profit growth

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