Gross-Profit-to-Assets Ratio – What is consider high depreciation | The Investment Quadrant by The Fifth Person

Questions › Category: Financials Quadrant › Gross-Profit-to-Assets Ratio – What is consider high depreciation

James Tay asked 4 years ago

GPTA ratio is best used on companies with high depreciation or high marketing expenses. How to determine if a company has high depreciation, any percentage? Rule of thumb to follow? Where to find the correct depreciation value – from balance sheet or income statement?

1 Answers

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Victor Chng answered 4 years ago

Hi James,

Usually high depreciation companies have cash flow to net income of more than 2x.