Find the operating cash flow for the year for Harper Brothers Incorporated if they had sales revenue of $300,000,000, cost of goods sold of $140,000,000, sales and administrative costs of $40,000,000, depreciation expense of $65,000,000, and a tax rate of 40%.

Question

Hugo Ali

Business

8 May, 20:00

Find the operating cash flow for the year for Harper Brothers Incorporated if they had sales revenue of $300,000,000, cost of goods sold of $140,000,000, sales and administrative costs of $40,000,000, depreciation expense of $65,000,000, and a tax rate of 40%.

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Furball · Answer 1

Answer:

Operating cash flow for the year for Harper Brothers Incorporated is - $65,000,000

Explanation:

Operating Cash Flow is the total cash generated from operating business, within a specific time period.

The formula here applicable is

Operating Cash Flow = Total Revenue - Total Operating Costs

OCF = TR - TOC

The total revenue is sales revenue of $300million

Total operating cost = $140million + $40million + $65million + Tax amount which is 40% of sales revenue

40% of sales revenue is equal to 40% of $300milion = $120million

So total operating cost = $245,000,000 + $120,000,000 = $365,000,000

OCF = $300,000,000 - $365,000,000 = - $65,000,000