It is about asset from cash flow. What is the answer 300 mean in EBIT + depreciaiton - Taxes? EBIT 500 Depreciaiton + 200 Taxes - 400 = 300 According to my teacher's slide, it should be operating cash flow. But by my logic, it should be the remaining EBIT. It's just that EBIT is deducted for something. How should that 300 represent operating cash flow? Does this mean my cash from operations has increased by 300 or decreased by 300? Neither, so what does 300 mean?
It is about asset from cash flow. What is the answer 300 mean in EBIT + depreciaiton - Taxes?
EBIT 500
Depreciaiton + 200
Taxes - 400
= 300
According to my teacher's slide, it should be operating cash flow. But by my logic, it should be the remaining EBIT. It's just that EBIT is deducted for something. How should that 300 represent operating cash flow? Does this mean my cash from operations has increased by 300 or decreased by 300? Neither, so what does 300 mean?
EBIT means earnings before interest and taxes.
Note that:
Revenue – cost of goods sold = gross margin
Gross margin – selling general and administrative expenses – operating expenses = EBITDA
EBITDA – depreciation charges – amortization charges = EBIT
EBIT – interest expenses = profit before tax (PBT)
PBT - tax = net income (or profit after tax)
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