QUESTION ON SBC
Can someone please let me know if my below understanding is correct? Thanks!
I/S
Stock based compensation is expensed on income statement, reducing NI. It is an operating expense, so it reduces EBITDA. Adjusted EBITDA, however, adds it back in.
SBC is added back to CFO, because it's a non-cash expense. However, SBC lowers CFF. So the two CF entries offset themselves? Not 100% sure on this part.
You add back SBC because it’s a non cash expense. The add back in CFO reverses the income statement expense that you mentioned. There is no outflow in CFF.
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