Why add the depreciation on operating income after tax?

Answers (1)

i just can guess that the question is related to cash flow statement. if so, because depreciation is non-cash. assume you have a cash OB of 1000 a PAT of 500 and depreciation of 100. Your cash PAT is 500+100 (as dpn was deducted to reach PAT), so your cash CB is 1000+600 = 1600

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