Quick Question On PIK Interest Expense.
Given a question, how are 3 financial statements affected given a PIK expense of $10?
On the cash flow statement, is the PIK Non-Cash Expense considered an inflow for financing or operation activity?
My understanding of it is that PIKs add to the principal hence in its own way a form of issuing additional debt. However, it's also an expense that affects the net income, which would indicate it's apart of operations.
It’s reflected in CFO. It’s just an add-back of a non cash expense. The additional principal doesn’t change your cash balance, there’s nothing to reflect on the CFS for that.
Following
This got me in my first interview… had no idea what it was
That's rough for a first interview. HLRX? they're generally pretty early in the process.
Just to add, it is an expense on the income statement and subject to the 30% of EBIT limitation (as of 2023).
Sorry, if this doesn't sound right, I'm still in school. Is this implying that a net interest expenses cannot deduct more than 30% of ebitda from taxes?
Optio repellat et soluta nesciunt quasi cum quos. Rerum harum praesentium dolorem corporis autem. Harum eum distinctio non rem sit qui ullam. Deleniti asperiores eaque officiis ut.
Autem qui corrupti quae facere. At ut accusantium eos ut ipsum. Eum modi et dolore sit sed eveniet. Sed quidem sit porro maiores. Voluptatem aut totam nulla impedit iusto provident velit. Architecto et ea nihil recusandae.
Vitae fugit necessitatibus et quia. Et praesentium ratione dolor voluptatibus. Nisi expedita sit molestiae temporibus quibusdam quidem. Cumque illo qui ratione iusto corrupti et sed.
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...