Tater and Pepper Corp. reported free cash flows for 2018 of $57.1 million and investment in operating capital of $40.1 million. Tater and Pepper incurred $15.4 million in depreciation expense and paid $20.7 million in taxes on EBIT in 2018. Calculate Tater and Pepper’s 2018 EBIT. (Enter your answer in millions of dollars rounded to 1 decimal place.)
Ans. | Operating cash flow = Free cash flow + Investment in operating capital | |||
$57.1 + $40.1 | ||||
$97.2 million | ||||
EBIT = Operating cash flow - Depreciation + Taxes on EBIT | ||||
$97.2 M - $15.4 M + $20.7 M | ||||
$102.5 million | ||||
*Operating cash flow is the sum of free cash flow and investment in operating capital. | ||||
*EBIT is the difference between operating cash flow and depreciation and then taxes on | ||||
EBIT is subtracted from this addition. | ||||
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