Depreciation on the 3 Financial Statements

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.

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.

You can grab the Excel file for yourself by clicking on the link at the top of this description.

[RohanDutt]

Hey Mate, I just wanted to say you are a legend and a life saver. Such a clear explanation filled with precision, God bless you!

[riteshmahajan]

you posted this video way back in 2013 and it touches upon something that is so complex and which hardly anyone making finance-related videos ever try to explain. You nailed it man, Thanks. Hope you can revise this video in 2021 with a different heading.

[ambujsaxena]

You are a legend. Your content is really the best!!

[paulj.]

Dude, you explain better than most profs do.
Thanks for this!

[killingmoon]

Thank you so much. I was struggling with this question for some time. Thank you for a clear explanation and Excel worksheet!

[financialmodeling]

Thanks for watching! More coming soon.

[teodordumitrescu]

Good video! I suggest more of these on topics like: Provisions, In depth Accrued Expenses and Revenues, Inventory and COGS

[jorgehdzd]

Great video. I believe the added value you provide over other sources is that you always dive deep into the understanding of the concepts, as well as the intuition behind them. I would suggest to maybe add an example of what would happen if it is the first time they buy the asset (i.e. how it would look in the cash flow statement). Currently, you just mention that the asset was bought in a previous period, but perhaps it might be misleading or incomplete to not mention this minor difference.

[Drrt]

Cool, guys! Good video. Very understandable!

[_kc_k]

bro, thank you so much for this video!

[strannick]

Hi;
Where exactly is that excel link? Ive looked everywhere. Great video

[danteorpianajr.]

Yow, can I ask the ipdated excel becuase the link doesn't work

[ewsafa]

I’m confused. If I sell a fixed asset, my current assets increase. So the change in NWC would be positive. So why do I subtract that from the cash flow?

[letitiahung]

Hi Brian, I cannot seem to download the file, thank u!

[ronjalodmark]

Anyway of still getting that excel download?

[IsxaaqAcademy]

Vivid explanation
But the Excel file is not available

[saifulisfree]

Question on interest expense if it increases by $10 is there a difference if it’s paid in cash? how does it flow? Like this?: income statement down 10, cash flow statement net income down 10 and then cash flow overall down by $10, balance sheet: cash and retained earnings both down by 10. I guess round about way of asking is there an additional impact of $10 on cash from financing activity if it’s paid in cash on top of the $10 hit to net income?

[oresthrachov]

I can not download the file, there are only videos for downloading.

[CloudashThe]

Should have dl the file when it was available. Great mistake :( Any possible way to dl the new or old excel file? Thanks!

[jeetrana]

The link given for the excel file is not working