Question

How much cash does the firm actually have? You are Olivia, a financial analyst who works for an investment bank in downtown Denver, Colorado. You are analyzing the current cash condition of Sukam Inc. You have the following information from the company's financial reports: The company reported net sales of $5,000 million. Assume that there were no noncash sales. Operating costs (excluding depredation and amortization) were 65% of its total revenues. Depreciation and amortization charges were 5% of total sales. Interest charges were 15% of EBIT with a tax rate of 40%. is the money that the business is left with after paying operating expenses, interest expense, and taxes. However, because some revenues and expense are not cash transactions, net cash flow indicates the true cash flow situation of the company. The company's current cash flow is: $1,275 million $765 million $1,015 million $506 million

Answer 1

Net profit= $765000 million

Step-by-step explanation:

Giving the following information:

The company reported net sales of $5,000 million.

Operating costs (excluding depredation and amortization) were 65% of its total revenues.

Depreciation and amortization charges were 5% of total sales. Interest charges were 15% of EBIT with a tax rate of 40%.

Revenues= 5000000

Operating costs= (5000000*0.65)= (3250000)

EBITDA= 1750000

Depreciation and amortization= (50000000*0.05)= (250000)

EBIT= 15000000

Interest= (1500000*0.15)= (225000)

Tax= (15000000-225000)*0.40= (510000)

Net profit= $765000 million