Equity financing and share issuance forecast
Equity financing affects cash, common stock, capital surplus, and sometimes stock option or warrant accounts. A linked forecast helps keep cash runway analysis separate from equity classification and non-cash stock compensation.
How do I forecast equity financing in a 3-statement model?
Enter financing cash proceeds separately from equity classification. Then add issuance costs, stock option expense, warrant exercise, or debt-to-equity swap entries if they apply to the scenario.
1) Split common stock and capital surplus
Share issuance may be recorded entirely to common stock or split between common stock and capital surplus. Keeping the split visible helps when the forecast is reviewed by finance, legal, or accounting stakeholders.
2) Keep stock compensation non-cash
Stock option expense can reduce profit without reducing cash in the same period. In runway planning, review it separately from salary payments and other operating cash costs.
3) Tie financing proceeds to runway and dilution review
Statement Engine focuses on PL, BS, CF, and Excel output. It does not calculate legal ownership dilution by itself, so use the forecast for cash and accounting movement, then maintain cap table details separately.