Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
9th Edition
ISBN: 9781259277214
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Question
Chapter 2, Problem 4CTCR
Summary Introduction
To discuss: The list of items found in the net income that is not a part of the operating cash flow.
Introduction:
Operating cash flow refers to the cash flow from operating activities or primary activities of the firm. Net income refers to the total income from all the activities of the firm for a given financial period.
The list of items found in the net income that is not a part of the operating cash flow:
Depreciation .- Interest expense.
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In comparing accounting net income and operating cash fl ow, name two items you typically find in net income that are not in operating cash flow. Explain what each is and why it is excluded in operating cash flow.
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Chapter 2 Solutions
Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 2.1 - Prob. 2.1ACQCh. 2.1 - Prob. 2.1BCQCh. 2.1 - What do we mean by financial leverage?Ch. 2.1 - Explain the difference between accounting value...Ch. 2.2 - What is the income statement equation?Ch. 2.2 - What are the three things to keep in mind when...Ch. 2.2 - Why is accounting income not the same as cash...Ch. 2.3 - What is the difference between a marginal and an...Ch. 2.3 - Do the wealthiest corporations receive a tax break...Ch. 2.4 - Prob. 2.4ACQ
Ch. 2.4 - Prob. 2.4BCQCh. 2.4 - Why is interest paid not a component of operating...Ch. 2 - What is the relationship between current assets...Ch. 2 - What is the purpose of the income statement?Ch. 2 - Prob. 2.3CCh. 2 - Prob. 2.4CCh. 2 - Liquidity. What does liquidity measure? Explain...Ch. 2 - Accounting and Cash Flows. Why is it that the...Ch. 2 - Book Values versus Market Values. In preparing a...Ch. 2 - Prob. 4CTCRCh. 2 - Prob. 5CTCRCh. 2 - Prob. 6CTCRCh. 2 - Prob. 7CTCRCh. 2 - Net Working Capital and Capital Spending. Could a...Ch. 2 - Prob. 9CTCRCh. 2 - Firm Values. Referring back to the examples used...Ch. 2 - Building a Balance Sheet. Bear Tracks, Inc., has...Ch. 2 - Building an Income Statement. Pharrell, Inc., has...Ch. 2 - Dividends and Retained Earnings. Suppose the firm...Ch. 2 - Per-Share Earnings and Dividends. Suppose the firm...Ch. 2 - Prob. 5QPCh. 2 - Tax Rates. In Problem 5, what is the average tax...Ch. 2 - Calculating OCF. Hailey, Inc., has sales of...Ch. 2 - Prob. 8QPCh. 2 - Calculating Additions to NWC. The December 31,...Ch. 2 - Cash Flow to Creditors. The December 31, 2015,...Ch. 2 - Cash Flow to Stockholders. The December 31, 2015,...Ch. 2 - Prob. 12QPCh. 2 - Market Values and Book Values. Klingon Widgets,...Ch. 2 - Prob. 14QPCh. 2 - Using Income Statements. Given the following...Ch. 2 - Prob. 16QPCh. 2 - Prob. 17QPCh. 2 - Prob. 18QPCh. 2 - Net Income and OCF. During the year, Belyk Paving...Ch. 2 - Prob. 20QPCh. 2 - Prob. 21QPCh. 2 - Prob. 22QPCh. 2 - Prob. 23QPCh. 2 - Net Fixed Assets and Depreciation. On the balance...Ch. 2 - Tax Rates. Refer to the corporate marginal tax...Ch. 2 - Prob. 1CCCh. 2 - Prob. 2CC
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Similar questions
- In computing the periods net operating cash flows, why are noncash expenses added back to net income?arrow_forwardTrue/False The purpose of the statement of cash flows is to provide information about total revenue and expenses.arrow_forwardwhat are the differences between the income statement and statement of cash flows and can you show a profit on your income statement, but have a negative cash flow? Explain.arrow_forward
- What are the differences between cash flows from operating activities and the elements of an income statement?arrow_forwardWhich of the following has a different effect on net profit than it does on cashflow? A.Cash sale to customer B.Payment for wages C.Payment for rent D.Depreciation of equipmentarrow_forwardWhich one of the following statements best describes a cash outflow in relation to the statement of cash flows? A: A cash outflow is an expense. B: A cash outflow may have been paid or not. C: A cash outflow is associated to both revenue and capital expenditure. D: None of the abovearrow_forward
- Which of the following calculations of net income is correct? Select one: Cash receipts minus cash payments Assets minus liabilities Revenues minus cost of goods sold Revenues and gains minus expenses and lossesarrow_forwardDo not copy from bartleby and chegg Cash-basis accounting produces a measure called net operating cash flow. Describe about the measure.arrow_forwardHow to adjust net income to cashflow.arrow_forward
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