Ratio Analysis
Valuations
Charting Technique
- Depreciation is not SOURCE of CASH
- It is a NON-CASH Expense deduction, which reduces Net Income
- To cancel that effect we use to add back DEPRECIATION while calcuating CASHFLOW from OPERATING ACTIVITIES
- It depends of certain situation
- Ex:Estimated Loss
- Ex:Court decisions/laws
Why Depreciation add back to INCOME FROM OPERATING ACTIVITIES
Why Depreciation add back to INCOME FROM OPERATING ACTIVITIES
Note:we add back every Non cash expense
CONTINGENT LIABILITIES