|
In accounting and tax however, depreciation has an entirely different meaning. The income tax has made more liars out of the American people than golf has. Depreciation of capital expenditures is a particularly strong factor. The interest coverage ratio is used to determine a firm's ability to pay interest on outstanding debt. Depreciation is often confused with the valuation of an item. Residential property is property rented out for nontransient living purposes.
Management is paid to manage taxes, just like other expenses. If the investor separately measures the company's leverage and combines this metric with EBITDA, it would be valid. The less money going to taxes, the more is left for equity owners. Complicated stuff here, so don't try to go it alone. Oh, there is one more thing you should know about the depreciation rules. Expert in mathematics, computers, income tax, with a wide variety of interests.
|
|