Leases - Example referring, question, solution

brk1yn

I am referring to CFAI TEXT (Financial Reporting Analysis - Page 451(Reading 38)) Example 11.

I am sorry as this example is too big I can't post it all.

But if you look at the solution for question 2 of this example.
They calculated the Operating Cash flow of 44,640. As this company CAPBS i am struggling to figure out how they calculated operating cash flow as they also have a depreciation expense which should be added back to the Operating cash flow. But they start from Sales in calculation for Operating cash flow which i am not able to understand. Same for the other company (Mentioned in example)

Can anyone break it down please...

TIA

trogulj

Read again carefully the two tables. They calculate TOTAL CHANGE IN CASH each year, not calculate CFO. CFO of CAPBS is always higher than OPIS because part of lease payment is categorized as CFF. They were just trying to tell you about how total cash flow is higher in CAPBS in initial years.

bluejazzy

It says for 2008

Sales 50,000
Interest paid -
Taxes paid 5360
Lease Expense -

Operating Cash flows 44640* (I did read it again.. All I want to know how they got this number)

sgupta0827

50-5.36=44.64

CP