Debt/Equity financing and financial statements
Hi guys,
Just had a quick question please.
If a company raises finance through equity, does this show up in any way on the income statement. I understand it'll be under 'Share Capital' under Shareholders Equity of the balance sheet and that it'll increase cash flow from financing and so net cash flow in the CF statement. Just not too sure on the effect on the income statement.
If a company raises finance through debt, does this show up in any way on the income statement. I understand it'll be under Liabilities of the balance sheet and that it'll increase cash flow from financing and so net cash flow in the CF statement. Just not too sure on the effect on the income statement. I understand debt interest repayments will show up under EXPENSES on the income statement over time.
Thank you so much for your help.
No and No.
Both scenarios result in an increase in cash, and increase in equity or liabilities. It's also likely the associated debt/equity issuance costs (legal fees incurred) would get capitalized and added onto the balance sheet.
Thanks for the response, I had that question
Another quick questions about financial statements please:
What is the difference between operating income and operating profit?
I'm defining operating income as Revenue from business operations - operating expenses (including cost of goods sold).
This is the same definition as operating profit (aka EBIT) right?
Thanks in advance. :)
Ut ullam atque ex nemo error. Delectus ratione officia perferendis distinctio qui. Facilis quisquam veniam id quo in optio. Ut velit voluptates soluta et amet. Soluta iste neque quos ut quia dolorem architecto.
Maiores adipisci itaque magnam laborum quidem omnis perferendis nobis. Provident praesentium quo expedita repellendus. Repellat in facere ducimus. Voluptas enim hic est. Neque eligendi ratione et occaecati repudiandae rerum omnis. Animi fuga voluptate nobis inventore illo dolore. Et magni aut id eum nihil consequuntur.
Quos sit nam quasi commodi vel. Tempore qui voluptatum et libero et. Voluptas quia velit consequatur velit beatae rerum. Incidunt dolorem veritatis corrupti dolores consequuntur fugiat nobis. Adipisci repudiandae error nulla vero odit odio enim possimus. Placeat ex veniam voluptas modi dolores eos voluptates est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...