20 Based on the information below what is Enigmas cash flow

20) Based on the information below, what is Enigma\'s cash flow from operations? Enigma has the following financial information: Net Income $70,000 Taxable Income (EBT) $100,000 Interest Expense $20,000 Depreciation Expense $15,000 Tax Expense $30,000 Increase in Accounts Receivable $20,000 Decrease in Inventory $40,000 No changes were made in interest payable or taxes payable.

Solution

Cash flow form operations = Net Income + Depreciation - Increase in Accounts receivable + Decrease in inventory

Cash flow from operations = 70,000 + 15,000 - 20,000 + 40,000 = 105,000

Cash flow form operations =$105,000