Summary
Depreciation and Amortisation combines the depreciation of tangible assets and the amortisation of intangible assets. Both are non-cash accounting expenses.
This measure is commonly used when analyzing cash flow and EBITDA.
Why it matters
Depreciation and amortisation reduce reported profit, but they do not represent cash paid during the period. Investors often add them back when reviewing operating cash flow or EBITDA.
This measure helps explain differences between profit and cash generation.
How it is calculated
Depreciation and Amortisation = Depreciation + Amortisation
How to read it
A higher figure may indicate that the company has significant tangible or intangible assets. It may also suggest that past investment is being expensed over time.
Investors should review this figure together with capital expenditure and asset intensity.