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How much was its net cash flow, assuming it had no amortization expense and sold none of its fixed assets.

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Posted on 
May 24th, 2023
Home Homework Help How much was its net cash flow, assuming it had no amortization expense and sold none of its fixed assets.
JBS Inc. reported a net profit of $4,750, and a depreciation expense of $885, for a grand total of $5 635. Net cash flow is calculated by subtracting any non-cash expenses from the company’s total income which in this case would include the depreciation expense as it does not involve an actual outlay of money. Therefore JBS Inc had a net cash flow of 4,750 USD (5,635 – 885).

In most cases, non-cash costs such as amortization are not added to the net cash flow calculation unless these expenses have already been incurred. It is still important to add them back in when calculating profits or losses as they represent resources that were used over time and must be recorded.

Finally fixed assets such as land or buildings are also excluded from these figures – instead their value is reduced over time through depreciation meaning that even if items are sold their impact on a business’ overall performance will usually remain unchanged.

After taking all expenses into consideration, it seems that JBS Inc. had a cash flow net of 4,750 US dollars. Understanding how to calculate these figures will give companies valuable insight into their financial status and allow them to plan future activities with more knowledge.

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