This week, we reviewed how to calculate after-tax income and net cash. After-tax income is the net income after the deduction of all federal, state, and withholding taxes. After-tax income represents the amount of disposable income that a consumer of a healthcare organization has available to spend.
Net cash refers to the amount of cash remaining after a transaction has been completed and all associated charges and deductions have been subtracted. It determines a company’s ability to pay off its obligations.
Read more: Investopedia: After-Tax IncomeLinks to an external site.
Cox Healthcare Clinic has taxable income of $750,000. The home’s depreciation expense is $200,000. Klaven is 100 percent equity financed and it faces a 40 percent tax rate.
What is the home’s after-tax income?
What is its net cash?
