Accounting & the 3 Statements
Explain the relationship between capex, depreciation/amortization, and PP&E. What does it mean when D&A consistently exceeds capex?
Model answer
PP&E roll-forward: Ending PP&E (net) = Beginning PP&E + Capex − Depreciation − Disposals/Write-downs (and, more completely, also less any impairments and +/− FX translation for foreign assets;…
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