medium · Investment Banking accounting
A company recognizes $100.0 million in Deferred Revenue on its balance sheet from a cash payment received in the prior year. In the current year, it 'earns' this revenue.
How does this impact the current year's EBITDA and Cash Flow from Operations (CFO)?
- EBITDA is unaffected; CFO increases
- Both EBITDA and CFO are unaffected
- EBITDA increases; CFO is unaffected
- Both EBITDA and CFO increase
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