Brooks 3e PPT 02
Brooks 3e PPT 02
Brooks 3e PPT 02
Financial
Statements
Learning Objectives
Figure 2.2
Figure 2.4
3 components:
• Operating cash flow (OCF)
• Net capital spending (NCS)
• Change in net working capital (∆NWC)
• Cash flow from assets = OCF – NCS - ∆NWC
OCF = EBIT + Depreciation – Taxes or
OCF = Net Income + Depreciation + Interest Exp.
NCS = End. Net Fixed Assets –Beg. Net Fixed
Assets + Depreciation
Figure 2.3
= $2,869 – $0
= $2,869
Revenues $925,000
Less operating expenses 325,000
= EBITDA 600,000
Less depreciation 125,000
= EBIT 475,000
Less interest expenses 55,000
= Taxable Income 420,000
Less taxes (34%) 142,800
= Net Income after taxes 277,200
$5,475,000 - $4,400,000
Net Working Capital $1,075,000
(cont.)
Copyright ©2016 Pearson Education, Ltd. All rights reserved. 2-35
Figure 2.8b