Answer is A… everything being subtracted except the Interest expense. I’m confused as to why this is not included. I know under IFRS, Interest paid can be an operating or financing activity, but under U.S GAAP it has to be operating. What am I missing here? Why is it not included?
You are mixing income statement and cash flow statement principles. Under US GAAP, interest paid is an operating activity within the cash flow statement. However, it is not an operating cost in the income statement and should therefore not be included in the operating result.