Amortization in Cash Flow Statement?
by admin ~ July 27th, 2010 . Filed under: Other - Business & Finance .
asked:
Since amortization is added to the net income to calculate the cash flow from operations, is amortization a source of cash? Explain what the outcome will be if a company increases its amortization charges in an attempt to increase its cash flows from operations.
Britta Belleau
Since amortization is added to the net income to calculate the cash flow from operations, is amortization a source of cash? Explain what the outcome will be if a company increases its amortization charges in an attempt to increase its cash flows from operations.
Britta Belleau
July 30th, 2010 at 8:22 pm
The lifetime of an intangible asset increasing amortization can reduce your amortization charges will affect your taxes due to lower ebitda and can thus increase the available cash from operations but this will decrease your operating.