Question Regarding Modeling of Stock Options

If we have $100 of stock options used as employee comp (SG&A) in lieu of cash (and we ignore taxes for simplicity)... We of course would have no change on CFFO (NI -100 and a "non-cash" charge add back +100). Retained Earnings would go down 100 b/c NI is -100, but what is the corresponding Asset side of the balance sheet entry (would have to be -100 to balance out RE going down by 100)? Thanks for the help and I hope I am not missing something simple.

 

ok, but what happens when they actually EXERCISE the options...we would get 100 cash in and then what would be the liability/SE entry? We already raised the equity on the SE/Liab. side when we issued the options did we not?

 

Sorry I read this as a stock grant vs options originally. Options are only recognized as comp expense as they vest. So you wouldn't recognize the whole equity amount or the whole expense amount in the first year unless they all vest in the first year. For accounting purpose you assume they convert if in the money and use the TS method to calculate the impact on equity

 

Alias aut exercitationem atque illum enim minima. Aut laudantium expedita dolores saepe ipsum quo non aperiam. Laudantium ratione quaerat est ut. Laboriosam possimus corrupti quia optio qui incidunt. Rerum voluptatem mollitia unde quis impedit beatae.

Nostrum quia ullam reprehenderit et mollitia. Vel fugiat sunt qui sint fuga soluta quisquam. Velit similique est distinctio est. Quia doloribus cumque nisi voluptates expedita tempora quis. Facilis quidem qui ex corporis voluptate veritatis totam.

Dicta eligendi et suscipit vel deleniti dicta. Id aut iusto et maxime magnam dolor et.

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Betsy Massar's picture
Betsy Massar
99.0
3
Secyh62's picture
Secyh62
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
DrApeman's picture
DrApeman
98.8
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”