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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (62830)	1/30/2003 11:26:57 PM
From: rkral	Read Replies (1) \| Respond to of 77400

mindmeld, Your response surprises me in two respects. First, that you addressed option grant expense even though my questions were about stock grant expense. Second, that you answered 'yes' to any of the questions. Is your reply about *option* expense because you recognize .. most stock grants are grants of nonvested stock .. *and* nonvested stock is just a an option with an exercise price of $0? Let me clarify my first question by rephrasing. Considering the net cash flow of *all* activities on the Cash Flow Statement .. operating, financing, and investment activities combined .. does expensing a stock grant reduce net cash flow? If you still answer 'yes', then why is stock-based compensation considered a non-cash expense? I agree with your operating cash flow statements. Ron

To: RetiredNow who wrote (62830)	1/31/2003 12:09:57 AM
From: hueyone	Read Replies (1) \| Respond to 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