Select Page
  

Earnings Before Taxes, Operating Cash Flow, and Operating IncomeDuring 1998, the Senbet Discount Tire Company had gross
sales of $1 million. The firm’s cost of goods sold and selling expenses were
$300,000 and $200,000, respectively. These figures do not include depreciation.
Senbet also had notes payableof notes payableof $1 million million. These notes carried an interest
rate of 10%. Depreciation was $100,000. Senbet’s tax rate in 1998 was 35%.a. What was
Senbet’s net operating income?b. What were
the firms earnings before taxes?c. What was
Senbet’s net income?
d. What was
Senbet’s operating Cash Flow?