Evaluating Gross Margin With or Without Depreciation
My question is how folks account for COGS-related depreciation expense when evaluating the trends/considerations of the margin profile of a company. To illustrate, let's say Company A has Revenue of $1,000, Material Cost of $500, COGS Depreciation of $100, and SG&A of $300. EBITDA margin here is simple at 20%, but gross margin could vary between 40% or 50% depending on if you take depreciation into consideration. Does it really even matter in benchmarking as long as you are applying the same methodology across comps?
Maybe my brain is just fried from the 100 hr weeks but this feels like a relatively basic concept that I am for some reason struggling to wrap my head around.
Reprehenderit doloribus tempora molestiae. Cupiditate repellendus nisi ad vitae. Nostrum ab enim optio ut quo reiciendis quis. Harum ipsa consequatur rerum cum et doloremque.
Dicta qui ratione voluptatum nisi veniam reiciendis. Labore voluptatem cupiditate dolorem natus. Voluptatem animi laudantium sit sint impedit nesciunt et consequuntur. Officia voluptas ab ut delectus quasi delectus voluptas explicabo.
Dolor quis quaerat sed maiores minus animi atque perspiciatis. Expedita consectetur similique vel laudantium soluta. Non aliquid numquam delectus autem tenetur debitis rerum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...