islandgyrl

“cash flow is more related to tax deducted.” .. howz that?
Wouldn’t COGS value have greater impact in bringing down the cash flow?
for the example given above by ov25, wouldn’t cash flows be somewhat like this:
for LIFO:

cash collections: 1000
cash to suppliers: (assuming no change in inventory and a/c payables): (400)
cash interest: (100)
cash taxes: (150)
net Cash Flow: 350
for FIFO:
–
cash collections: 1000
cash to suppliers: (assuming no change in inventory and a/c payables): (300)
cash interest: (100)
cash taxes: (180)
net Cash Flow: 420
So although the tax expense is higher in FIFO, the net cash flow seems to be higher.
I know I seem to be making some mistake … but can’t figure out…
help pls..
thanks.