Operating cash flow. Find the operating cash flow for the year for Harper Brothers, Inc. if it had sales revenue of $305,400,000, cost of goods sold of $146,600,000, sales and administrative costs of $39,700,000, depreciation expense of $60,400,000, and a tax rate of 40%. The operating cash flow is $ (Round to the nearest dollar.)
Operating cash flow (OCF) refers to the amount of cash generated by a company's main operations, such as the production and sale of goods or services, after deducting operating expenses such as wages, taxes, and raw materials. It measures the company's ability to generate cash from its ongoing operations, independent of financing or investment activities. OCF is important as it provides insight into a company's financial health and helps assess its ability to pay dividends, reduce debt, and invest in growth.
Depreciation is not included in operating cash flow (OCF). OCF measures the cash generated by a company's core operations, after deducting operating expenses. Depreciation is a non-cash expense that represents the allocation of the cost of a fixed asset over its useful life and is subtracted from a company's revenue to arrive at its taxable income. While depreciation affects a company's net income, it does not affect the cash flow generated from operations. Instead, it is subtracted from net income when calculating the net cash flow from operating activities on the cash flow statement.
Taxes are included in operating cash flow (OCF). OCF measures the cash generated from a company's core operations, after deducting operating expenses, including taxes. Taxes owed by a company can be either cash expenses, such as sales tax, or non-cash expenses, such as income tax. Both types of taxes affect a company's operating cash flow as they are subtracted from its revenue to arrive at its taxable income. The cash tax payments made by a company during the period are also subtracted from its operating cash inflows to arrive at its net operating cash flow.
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