answersLogoWhite

0

An individual's net income is used to determine how much income tax is owed. ... cash flows from operating activities ...

User Avatar

Wiki User

16y ago

What else can I help you with?

Continue Learning about Accounting
Related Questions

Did you pay your taxes this year is it a statement of cash flow or a income statement?

taxes payment is part of cash flow statement and not part of income statement.


If decrease in income taxes payable cash flow will be?

If there is decrease in income tax payable amount it will reduce the cash flow from operating activities or cash outflow from operating activity.


Depreciation affect cash flow?

There is no affect of depreciation on cash flow that's why in indirect method of cash flow net income is adjusted for depreciation to calculate cash flow from operating activities.


How does depretion affect cash flows How do sunk costs affect the detrmination of cash flows. What is the project initial out lay?

Depreciation does affect cash flow indirectly. Using different methods of depreciating an asset will impact the depreciation expense.Even though depreciation expense is non-cash transaction, it indirectly affect cash flow through the income tax effect. Having higher depreciation expense can lower your taxable income, thereby reducing your income tax expense, which will change your cash outflow for taxes.


What is distributable income?

Distributable cash flow is a theoretical number. It is not an actual cash flow. = earnings + non cash expenses +/- change in non-cash WC. To get Distributable cash flow, you can also start from EBITDA and subtract charges such as interest expenses, and income taxes.


Are deferred taxes included in cash flow calculations?

Deferred taxes are not typically included in cash flow calculations because they represent timing differences between accounting income and taxable income, rather than actual cash movements. Cash flow calculations focus on the cash generated or used during a specific period, while deferred taxes are more about future tax liabilities or assets. However, adjustments may be made to reconcile net income to cash flow from operations by accounting for changes in deferred tax assets and liabilities.


What is the amount of a firms cash flow from assets if have operating income of 3.9 billion depreciation of 300 million cash taxes paid of 700 million increase in net operating working capital 600 mi?

To calculate the cash flow from assets, you start with the operating income, add back depreciation, subtract cash taxes, and then account for changes in net operating working capital. The formula is: Cash Flow from Assets = Operating Income + Depreciation - Cash Taxes - Increase in Net Operating Working Capital. Plugging in the numbers: Cash Flow from Assets = 3.9 billion + 0.3 billion - 0.7 billion - 0.6 billion = 2.9 billion. Therefore, the firm's cash flow from assets is 2.9 billion.


Does taxes paid go on a balance sheet?

Taxes paid is part of cash book or cash flow statement and tax expense in income statement and tax payable is balance sheet item.


EXPLAIN HOW DEPRECIATION GENERATES CASH FLOW FOR A COMPANY.?

I assume what you are referring to is the fact that if your are using the indirect approach to complete a cash flow statement, you add back depreciation. This step makes it look like depreciation is generating cash flow for the company. The reason for adding depreciation is that when we are preparing our cash flow statement, we are reconciling net income to account for things that are not reflected or things that do not affect cash flows. If we simplify it, we can say that net income equals ( Sales - Expenses ). Depreciation is an expense that decreases our net income, but it is simply an accounting value to match expenses with revenues produced, and does not affect cash. So, since we deducted depreciation to get to net income we need to add it back when we do our cash flow statement to reconcile net income with our cash flow.


What is the aim behind a cash flow note?

The aim of a cash flow note aka cash flow statement is to show how changes in income and balance sheets affect cash and/or cash equivalents. This gives an indication of how much money is flowing in and out of the company or household.


What is operation cash flow?

Operation Cash Flow Ratio is a financial ratio that is used to identify the percentage of money raised by the company as part of the operation cash flow to the total debt the company owes. Operating cash flow is the cash generated from the operations of the organization after excluding taxes, interest paid, investment income etc.FormulaOCFR = Operation Cash Flow / Total Debts


Carmichael hobby shop has an EBITDA of 512725.50 EBIT 362450.20 and cash flow of 34846125 what is this firms net income after taxes?

EBITDA of 512,725.50 - EBIT 362,450.20 = 150,275.30 Depreciation Cash flow of 34,846,125 - 150, 275.3 Depreciation = 34,695,849.70 Net Income