Accounting allocation of an asset's cost over its useful life.
Non-cash expense that reduces reported earnings without affecting cash flow. Methods: straight-line, accelerated. Real economic depreciation often exceeds accounting depreciation, which is why FCF (subtracts capex) is more conservative than EBITDA.
Accounting allocation of an asset's cost over its useful life. Non-cash expense that reduces reported earnings without affecting cash flow. Methods: straight-line, accelerated. Real economic depreciation often exceeds accounting depreciation, which is why FCF (subtracts capex) is more conservative than EBITDA.
In financial metrics, Depreciation is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.
Non-cash expense that reduces reported earnings without affecting cash flow. Methods: straight-line, accelerated.
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