Hello Search Funders.
Interested to know what everybodys thoughts are regarding adding or not adding depreciation in when valuing a business?
I see it as a tax break for capital expenditures (which a business requires in order to create revenue). Cap ex is an expense obiously.. so then why is depeciation added into a valuation and multiplied?
Happy to hear peoples opinions and how you all view this when valuing a company.
Depreciation - To add or not to add?
by a searcher
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I use "CapX payment" b/c CapX is frequently financed rather than paid all at once.
Also, recognize that Depreciation is a pre-tax amount, whereas CapX is an after-tax amount.