Goldman Sachs DeckHard

Rapid-fire accounting: depreciation goes up by $10, tax rate is 40%. Walk through the three statements in under 60 seconds.

Model answer

Income statement: pre-tax income falls $10, taxes fall $4, so net income falls $6. Cash flow statement: start with net income down $6, add back the $10 of non-cash depreciation, so cash is UP $4.…

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