What Is the Formula for Computing Operating Cash Flow

question 39

Multiple Choice

What is the formula for computing operating cash flow?

• A)EBIT + Depreciation − Current taxes
• B)EBIT + Depreciation − Interest expense − Current taxes
• C)EBIT + NWC − Depreciation
• D)EBIT − Depreciation + Current taxes
• E)EBIT − Change in NWC + Depreciation − Current taxes

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Definitions:

Market Value

The immediate cost for transactions involving assets or services within a marketplace.

Book Value

The value of an asset according to its balance sheet account balance, calculated by subtracting any related depreciation or amortization from its original cost.

Capital Balance

The amount of money that partners or shareholders have invested in a business, not including profits and losses.

Income-Sharing Ratio

The ratio used by partnerships to distribute profits and losses among partners according to their agreement.