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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.16

+0.2%

Dec 26 9:30 AM EST

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To: RetiredNow who wrote (62830)	1/31/2003 12:09:57 AM
From: hueyone	Read Replies (1) of 77400

but the net net would be a reduction of operating cash flows if it was expensed Wrong answer Mind. Net Cash Provided by Operating Activities is increased by the amount of the tax savings, nothing less, nothing more. For a whole host of reasons, I am truly shocked that someone who purports to be a CPA would give the answer you did. stockholder's equity would also be reduced if stock options were expensed, because net income is a part of retained earnings, which is a part of stockholder's equity At best, you got the answer half right. Retained Earnings are reduced by the value of the stock grants (we are not talking stock options here) less the tax savings, but Shareholder's Equity overall is increased by the amount of the tax savings. Paid in Capital was increased by the amount of the stock grants which more than offset the reduction in Retained Earnings; thus Shareholders Equity increased. JMO, Huey

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