2014CFA1级-每日一练-财务分析-010 Recently, financing, substance, necessary, activities

brain_wash_your

Earlier this year, Barracuda Company issued 5,000 employee stock options. Recently, 2,000 options were exercised at a price of 10 per share. To avoid dilution, Barracuda purchased 2,000 shares at an average price of 12 per share. Barracuda reported both transactions as financing activities in its cash flow statement. For analytical purposes, what adjustment is necessary to better reflect the substance of the stock repurchase?


Operating cash flow Financing cash flow
A)Decrease 4,000        Increase 4,000
B)Decrease $4,000        No adjustment
C)No adjustment Increase $4,000



答案 A
Barracuda reported a 4,000 net outflow from financing activities [2,000 options ?— ( 12 average market price 10 exercise price)]. However, since the options are a form of compensation, the 4,000 outflow should be reclassified as an operating activity for analytical purposes. This is accomplished by increasing financing cash flow 4,000 and decreasing operating cash flow 4,000.