FinanceAdvanced
Depreciation
Spreading the cost of something expensive across the years you use it, instead of counting it all in the month you bought it.
Example
A ₹3L machine expected to last five years is shown as ₹60,000 of cost each year.
Related terms
CapEx / OpEx
CapEx is money spent on things you keep for years, like machines or laptops. OpEx is the day-to-day running cost, like salaries and rent.
EBITDA
A measure of a company's core operating profit, before accounting effects like interest, tax and asset write-downs. It shows how the business does at its heart.
Balance Sheet
A snapshot of what the business owns and owes on a single date. What you own minus what you owe is what the business is worth on paper.
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