medium · Investment Banking accounting
What happens to the three financial statements when a company records $10M in Stock-Based Compensation (SBC)? (Assume a 0% tax rate for simplicity)
- Net Income down $10M; CFO up $10M; Cash unchanged; Equity unchanged
- Net Income up $10M; CFO up $10M; Cash up $10M; Equity up $10M
- Net Income down $10M; Cash down $10M; Assets down $10M; Equity down $10M
- Net Income flat; CFO down $10M; Cash down $10M; Liabilities up $10M
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