Taking into account depreciation
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Taking into account depreciation
Which other sector stocks do we have to take depreciation into account besides construction stocks?
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dragonhart2
- Investing Mentor
- Posts: 376
- Joined: Fri Jul 01, 2011 5:09 pm
Re: Taking into account depreciation
hi,
All stocks...especially agressively expanding company like Breadtalk.
Depreciation is a non-cash expense to reduce the value of an asset e.g plant, factory, dough-making machine, etc. over the useful life of it....Most important thing to note is it is a "non-cash expense" that reduces the reported profits....which means that i already paid for it when i bought it....actual $$ already paid last time....that's when u want to know the real profits, u need to add it back.....for the company, reduced profits means reduced tax...who doesn't want to pay less tax...........and for people who dig deeper, can find a company worth more than what the market values it.....most people only look at reported profits(a rather supeficial view of the financial health)....which is what happened to Breadtalk.
cheers,
jason.
All stocks...especially agressively expanding company like Breadtalk.
Depreciation is a non-cash expense to reduce the value of an asset e.g plant, factory, dough-making machine, etc. over the useful life of it....Most important thing to note is it is a "non-cash expense" that reduces the reported profits....which means that i already paid for it when i bought it....actual $$ already paid last time....that's when u want to know the real profits, u need to add it back.....for the company, reduced profits means reduced tax...who doesn't want to pay less tax...........and for people who dig deeper, can find a company worth more than what the market values it.....most people only look at reported profits(a rather supeficial view of the financial health)....which is what happened to Breadtalk.
cheers,
jason.
Mystique wrote:Which other sector stocks do we have to take depreciation into account besides construction stocks?