The following data are taken from the AlphaBeta Company's financial statements ending Dec 31, 1990:
Increase in salaries payable 120
Decrease in accounts payable 45 -
Provision for bad debt 15 -
Depreciation 90 -
Interest paid 35 -
Proceeds from new bonds issued 225
Net Income 350 -
Tax rate 35%
What was AlphaBeta's operating cash flow in 1990?
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A. B. C. D.D
In this case, OCF = 350 + 120 - 45 + 15 + 90 = 530. Proceeds from bond issue are part of financing cash flow, not of OCF. Note that tax rate is not relevant in the indirect method since it has already been factored into in the net income figure. Also, only non-cash items need to be adjusted.