| Amortization | |
 1. The paying off of debt in regular installments over a period of time. 2. The deduction of capital expenses over a specific period of time. Similar to depreciation, it is a method of measuring the consumption of the value of long-term assets like equipment or buildings. |
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 Think of amortization (the deduction of capital expenses) as a way to claim the decrease in value on your car every year. If you bought your car new for $20,000 and after the first year it is worth $17,000, theoretically you could amortize the $3,000 for tax and financial purposes. |
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 EBITDA: The Good, The Bad, And The Ugly - Find out the benefits of using EBITDA to analyze profitability and the dangers of using it as a measure of cash flow. Appreciating Depreciation - Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line. |
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Related Terms
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