How do you solve for after tax cash flow given the following info: Revenue: 5000 COGS: 2000 Depreciation: 400 Tax Rate: 30% Is it simply: 5000 - 2000 = 3000 - 400 = 2600 2600 x (1-.3) = 1820 1820+400 = 2220 Is this correct? After tax cash flow is $2220?
I thought depreciation is added back in after taxes.
I think so
Yep that looks right to me
you don’t really know the cash flow as you’d have to take into account non-cash working capital changes as well (accts payable, receivable, inventory) but yes you add back depreciation if you work your way from net income and back up (indirect)