Financial Modeling - Depreciation & Amortization in COGS
Hi,
I am building a financial model for a case study. I have access to Factset and Facset is including the Deprecation/Amortization in COGS. I do not have experience working with D&A in cogs so I am unsure of how to proceed. For the proforma should D&A be included in cogs or can I account for it in SG&A?
Any insight would be appreciated
I'm not sure if certain industries put D&A in COGS for some reason (Maybe if you're talking about a production facility / manufacturing plant????)
But typically you put D&A as its own line-item so people can easily add it back to operating income when trying to get to true cash flow / EBITDA. What is the business vertical of the company you're digging into?
Edit: This should help, https://www.wallstreetoasis.com/forum/investment-banking/depreciation-i…
Some businesses do include D&A in COGS instead of having it standalone line item. Have never seen it in SG&A tbf, either separately or in COGS. If you have the datapoints, might be better to still have a separate D&A schedule and feed that in COGS
It's a cost allocation thing for certain industries. They'll have D&A in both COGS and SG&A and total addback in the CF.
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