Question

The 2017 balance sheet of Kerber’s Tennis Shop, Inc., showed $2.5 million in long-term debt, $740,000 in the common stock account, and $6.05 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.35 million, $915,000, and $8.45 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $240,000. The company paid out $540,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $700,000, and the firm reduced its net working capital investment by $175,000, what was the firm's 2018 operating cash flow, or OCF?

Answer 1