Homework SourseSheryls Shipping had sales last year of 13500 The cost of go
Sheryl’s Shipping had sales last year of $13,500. The cost of goods sold was $7,200, general and administrative expenses were $1,700, interest expenses were $1,200, and depreciation was $1,700. The firm’s tax rate is 30%.
a. What are earnings before interest and taxes?
b. What is net income?
c. What is cash flow from operations?
Solution
EBIT = $2,900.00
Net Income = $1,190.00
Cash flow from operations = OCF = $4,090.00
Particulars
Amount in $
Sales
$13,500.00
Less: Cost of goods sold
$7,200.00
Less: General and administrative expenses
$1,700.00
Less: Depreciation
$1,700.00
Earnings Before Interest and Taxes
$2,900.00
Less: Interest expenses
$1,200.00
Gross Income
$1,700.00
Less: Taxes @30% of Gross Income
$510.00
Net Income
$1,190.00
Earnings Before Interest and Taxes
$2,900.00
Less: Taxes @30% of Gross Income
$510.00
Add: Depreciation
$1,700.00
Operating Cash Flow
$4,090.00
| Particulars | Amount in $ |
| Sales | $13,500.00 |
| Less: Cost of goods sold | $7,200.00 |
| Less: General and administrative expenses | $1,700.00 |
| Less: Depreciation | $1,700.00 |
| Earnings Before Interest and Taxes | $2,900.00 |
| Less: Interest expenses | $1,200.00 |
| Gross Income | $1,700.00 |
| Less: Taxes @30% of Gross Income | $510.00 |
| Net Income | $1,190.00 |
