technical question: Which of the financial statements would you need to...

Wouldn't you need the income statement for EBIT?

EDIT: And couldn't you compare PP&E for that year and the prior while looking at depreciation expense to figure out capex?

Negative. Income Statement is the correct answer.

Income statement and cash flow. Income statement for EBIT and you need to find D&A on the cash flow statement. You can find capex in investing on the CFS, or alternatively, just back it out doing a BASE analysis with the change in PP&E and depreciation numbers.

The cash flow statement gets its Depreciation from the Income Statement, not the other way around.

Income Statement and Cash Flow Statement together. D&A should be taken from the cash flow statement because depreciation costs can get lumped into COGS in some cases, so just adding back the D&A on the income statement won't always be 100% accurate.

I just reread the question and it says "statements". I initially read it as statement. Cash Flow and Income Statement is the obvious answer. I was perplexed on how to find the answers in one statement. Is this possible in one statement?

You could get pretty close with either the income statement or the cash flow statement. If you're just looking for an approximate either one should be okay as long as you can back up your choice to the interviewer.

Downtown, I'm not disagreeing with your answer. However, how can taking the Depreciation from the Cash Flow Statement be any different than taking it from the Income Statement? The Cash Flow Statement D&A is comprised from the Income Statement D&A...The numbers would be the same assuming accurate reporting.

On second thought.....

Maybe IS and CF are the same. It's just easier to get it from CF in some circumstances.

You can't get it from the BALANCE SHEET due to asset acquisitions and disposals.

Correct answer is both CF & IS. All things being equal, you need CF for capex and IS for taxes.

Best depreciation figures are found on CF. Companies can include depreciation in both COGS and OpEx for the same period. So an income statement could show only a portion of total depreciation (lumped into COGS; broken out in OpEx), which will appear in aggregate on the CF statement.

Honestly depends on how loose "approximate" is; I just saw that after I posted. If loose enough to the point of estimating a tax rate, then the CF would be an appropriate answer. Net income * XX%... So your best bet is to read into is this a) a straight-forward technical, or b) an open-ended, show me how you think question. Granted, discussing statement relation is typically not up for discussion.

If you have the CF and IS, there is no approximation of EBITDA nor CapEx. It's exact.

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... depreciation on the Income Statement is 99.9% of the time embedded in COGS and SGA. You are NOT going to find a clean number on the IS. That's why you need the CFS...

I understand where you're all going with this. My confusion was I thought people were saying you'll get two different numbers from the Income Statement and Cash Flow Statement. Which is true to an extent, on the Income Statement you can get 2 and 2, which equal 4, but on the Cash Flow Statement you get 4 straight up.

You don't necessarily NEED the Cash Flow Statement for D&A...it just helps by providing a clean number.

Not correct, ekimlacks, unless when you say "which statement" you're including all notes.

If the COGS-"2" is lumped into COGS, you have no idea of its existence sans CF statement.

Some audits break it out, some don't.

i thought you guys were smarter than this, you can get all the info from the cash flow statement

Tax is not on CF statement.