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Depreciation, amortization and EBITDA
The non-cash costs in every income statement, the profit measure that adds them back, and how much difference it makes.
The short answer
Depreciation spreads the cost of equipment, buildings and other physical assets over the years they're used; amortization does the same for intangible assets such as acquired customer lists. Both reduce profit without any cash going out that year. EBITDA, earnings before interest, taxes, depreciation and amortization, adds them back. Across the 58 companies here, D&A is a median 18.4% of operating income plus D&A; at General Motors it's 80.5%.
Where to find D&A
Many companies don't show depreciation as its own line on the income statement. It's folded into cost of sales and operating expenses. The reliable place is the first section of the cash flow statement, where it's added back to net income because no cash left the business. The notes give more detail, such as depreciation by asset class.
EBITDA
EBITDA ≈ operating income + depreciation and amortization
EBITDA is popular for comparing companies with different debt loads, tax situations and asset ages, and lenders use it in debt covenants. It isn't a GAAP measure. Item 10(e) of Regulation S-K names it as a non-GAAP measure, so a company that reports EBITDA in a filing has to reconcile it to net income. Definitions vary, which is why the table below uses one simple version for every company.
The enterprise value and EV/EBITDA calculator builds that simple EBITDA from operating income plus D&A, then divides a market cap you work out from a price you type, plus debt minus cash, by it.
What EBITDA leaves out
- Capital spending. Depreciation is the accounting echo of past investment. A business with heavy D&A usually has to keep spending to replace equipment, and EBITDA ignores that cash. Free cash flow doesn't.
- Interest and taxes. Both are real payments. Interest coverage looks at the first.
- Working capital. Cash tied up in inventory and receivables doesn't show up in EBITDA.
The share of D&A in the table tells you how much an EBITDA figure lifts a company's profit above operating income. At the top of this list are General Motors, Palo Alto Networks, CVS Health; at the bottom, Arista Networks, Palantir, Sandisk. A very high share can mean heavy physical assets, assets the company leases out to customers, or simply a year of thin operating income; the notes say which.
Every company
Operating income from each income statement and depreciation and amortization from each cash flow statement, latest fiscal year, sorted by D&A's share. The first column is a simple EBITDA-style total, operating income plus D&A; companies' own EBITDA figures often make other adjustments. Banks are left out.
Common questions
What is the difference between depreciation and amortization?
Depreciation spreads the cost of physical assets like equipment and buildings over their useful lives. Amortization does the same for intangible assets with a limited life, such as acquired customer relationships.
Is EBITDA a GAAP measure?
No. It's a non-GAAP measure. Companies that report it in SEC filings must reconcile it to net income, the closest GAAP figure.
Why do analysts use EBITDA?
To compare operating profit across companies with different debt, tax and depreciation profiles, and because lenders often set loan terms using it.
Where is depreciation in the financial statements?
Always in the operating section of the cash flow statement, where it's added back to net income. On the income statement it's often included within cost of sales and operating expenses.
Why can EBITDA be misleading?
It leaves out the cost of replacing assets, interest, taxes and changes in working capital, all of which use cash.
Disclosures
- Editor holdings
- The editor holds no position in any company named on this page. As of Nov 11, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Nov 10, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
More in Learn and Tools · Methodology & Disclosures explains where every number comes from.