How are stocks splits accounted for in 3 statement models?

Greetings everybody, 


I'm currently doing a three statement model for Shopify and they recently had a 10:1 stock split and I'm wondering how this will be accounted for in a three statement model, I could take the lazy rout and just multiply the current shares outstanding by 10, but I want to do it the 'professional' way. To all the ER analysts out there, I would really appreciate your input here.

If you can't tell, I'm new to three statement modeling and trying my best to learn it the proper way by building my own cases and learning from my mistakes.


Thanks for advice in advance. 

 
Most Helpful

long story short, not very important. Proper way would be adjust for the time in the quarter that the split happened (ie a weighted avg based on the days in the q after the split happened, and in following quarter would be the new baseline to model going forward w/modest incremental share dilution off that new base to reflect incremental SBC), but with no new equity being raised, no change to underlying line items ie net income or cash flow etc, its really not a big deal. Be mindful of adjusting growth rates to reflect true EPS growth/FCF per share growth (for SHOP wouldnt be a relevant valuation metric in the near term anyways)

 

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