Capstone Holding (Capstone Holding) Depreciation, Depletion and Amortization : $0.32 Mil (TTM As of Mar. 2024)

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Capstone Holding Depreciation, Depletion and Amortization Chart

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Capstone Holding Depreciation, Depletion and Amortization Calculation

Depreciation is a present expense that accounts for the past cost of an asset that is now providing benefits.

Depletion and amortization are synonyms for depreciation.

Generally:
The term depreciation is used when discussing man made tangible assets
The term depletion is used when discussing natural tangible assets
The term amortization is used when discussing intangible assets

Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Mar. 2024 adds up the quarterly data reported by the company within the most recent 12 months, which was $0.32 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Capstone Holding  (OTCPK:CAPS) Depreciation, Depletion and Amortization Explanation

One of the key tenets of Generally Accepted Accounting Principles (GAAP) is the matching principle. The matching principle states that companies should report associated costs and benefits at the same time.

For example:

If a company buys a $300 million cruise ship in 1982 and then sells tickets to passengers for the next 30 years, the company should not report a $300 million expense in 1982 and then ticket sales for 1982 through 2012. Instead, the company should spread the purchase price of the ship (the cost) over the same time period it sells tickets (the benefit).

To create income statements that meet the matching principle, accountants use an expense called depreciation.

So, instead of reporting a $300 million purchase expense in 1982, the company might:

Report a $30 million depreciation expense in 1982, 1983, 1984...and every year after that for the 30 years the company expects to sell tickets to passengers on this cruise ship.

To calculate depreciation, a company must make estimates and choices such as:

The cost of the asset
The useful life of the asset
The salvage value of the asset at the end of its useful life
And a way of spreading the cost of the asset to match the time when the asset provides benefits

The range of different ways of spreading the cost under GAAP accounting is too long to list. However, public companies in the United States explain their depreciation choices to shareholders in a note to their financial statements. It is critical that investors read this note. Investors can find this note in the company's 10-K.

Past depreciation expenses accumulate on the balance sheet. Most public companies choose not to show this contra asset account on the balance sheet they present to shareholders. Instead, they simply show a single item. This single asset item may be marked Net. Such as Property, Plant, and Equipment - Net. It is actually the asset account netted against the contra asset account.

A contra asset account is an account that offsets an asset account. So, for example a company might have:

Property, Plant, and Equipment - Gross: $150 million
Accumulated Depreciation: $120 million
Property, Plant, and Equipment - Net: $30 million

In this case, the only item likely to be shown on the balance sheet is Property, Plant, and Equipment - Net. This is the cost of the company's property, plant, and equipment (asset account) minus the accumulated depreciation (the contra asset account). It means the company's assets cost $150 million, the company has reported $120 million in depreciation expense over the years, and the company is now reporting the assets have a book value of $30 million.

It is possible for a company to have fully depreciated assets on its balance sheet. This means the company's estimate of the useful life of the asset was shorter than the asset's actual useful life. As a result, the asset - although it is still being used - is carried on the balance sheet at its salvage value.

This is a reminder that depreciation involves estimates and choices. It is not an infallible process.

Companies do not have cash layout for depreciation. Therefore, depreciation is added back in the cash flow statement.

Although depreciation is not a cash cost, it is a real business cost because the company has to pay for the fixed assets when it purchases them. Both Warren Buffett and Charlie Munger hate the idea of EDITDA because depreciation is not included as an expense. Warren Buffett even jokingly said We prefer earnings before everything when criticizing the abuse of EDITDA.

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Be Aware

Depreciation estimates make the calculation of net income susceptible to management's accounting choices. These choices can be either overly aggressive or overly conservative.

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Capstone Holding Depreciation, Depletion and Amortization Related Terms

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Operating Income Operating Margin % EBITDA

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Capstone Holding (Capstone Holding) Business Description

Executives

Alimco Financial Corp	other: See Remarks	2336 S.E. OCEAN BOULEVARD SUITE 400, STUART FL 34996
Neil S Subin	10 percent owner	2336 S.E. OCEAN BOULEVARD, #400, STUART FL 34996
Miller Lloyd I Iii	10 percent owner
Michael Toporek	director, other: See Explanation of Responses	C/O MECHANICAL TECHNOLOGY, INCORPORATED, 325 WASHINGTON AVENUE EXTENSION, ALBANY NY 12205
Bp Peptides, Llc	10 percent owner	122 EAST 42ND STREET, SUITE 4305, NEW YORK NY 10168
Matthew E. Lipman	director, 10 percent owner	C/O MECHANICAL TECHNOLOGY, INCORPORATED, 325 WASHINGTON AVENUE EXTENSION, ALBANY NY 12205
Biotechnology Value Fund L P	10 percent owner, other: Direct Beneficial Owner	44 MONTGOMERY STREET, 40TH FL, SAN FRANCISCO CA 94104
Leslie M Taeger	officer: Chief Financial Officer
Mark N Lampert	10 percent owner	1 SANSOME ST, 30TH FL, SAN FRANCISCO CA 94104
Eric W Fangmann	director	1540 10TH AVENUE, SAN DIEGO CA 92101
Holliman John M Iii	director, officer: Executive Chairman	6155 N SCOTTADALE ROAD STE 100, SCOTTSDALE AZ 85250
Fredric J Feldman	director	1275 W. WASHINGTON, TEMPE AZ 85281
Bvf Partners L P/il	10 percent owner, other: Indirect Beneficial Owner	44 MONTGOMERY ST., 40TH FLOOR, SAN FRANCISCO CA 94104
Bvf Investments Llc	10 percent owner, other: Direct Beneficial Owner	1 SANSOME ST, 30TH FL, SAN FRANCISCO CA 94104
William M Wardell	director	58 CHRISTOPHER DR, PRINCETON NJ 08540