Depreciation on the 3 Financial Statements (7:53)
In this video, we walk you through how an increase in Depreciation affects the 3 financial statements and highlight the specific line items that change on the Income Statement, Balance Sheet, and Cash Flow Statement.
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We also go through the *intuition* behind these changes – namely, how Depreciation affects a company’s taxes but is not a true cash expense – and why even though this is a somewhat artificial scenario, it’s still a very common question that you need to understand in investment banking and other finance interviews.