Depreciation And Amortization
Depreciation and amortization (D&A) are non-cash accounting expenses that allocate the cost of tangible fixed assets (depreciation) and intangible assets (amortization) over their estimated useful lives.
Example: A company with tangible assets records depreciation of 2 million and amortization of 1 million in a year, reducing pretax income by 3 million while cash flow from operations is not immediately affected by these non-cash charges.
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