Module VI· Three-Statement Model MechanicsAdvanced
Question
How do you integrate equity movements such as issuance, buybacks, and SBC into the model?
Answer
Equity issuance increases cash and equity. Buybacks reduce cash and equity. Dividends reduce cash and retained earnings. SBC increases APIC and is added back in cash flow because it is non-cash, but it may dilute shares. Track share count separately for EPS and ownership calculations.