## How to Calculate Depreciation: A Practical Guide for Businesses and Investors
If you are a business owner or investor looking to understand financial statements, the term "depreciation" might seem mysterious. But in fact, **how to calculate depreciation** is a simpler process than you think and is very important for analyzing a company's financial strength.
### Why is understanding depreciation important?
When a company purchases equipment or major assets, they need to allocate the cost over the period of use. It’s not foolish to deduct the entire cost in the first year because the asset wi
View OriginalIf you are a business owner or investor looking to understand financial statements, the term "depreciation" might seem mysterious. But in fact, **how to calculate depreciation** is a simpler process than you think and is very important for analyzing a company's financial strength.
### Why is understanding depreciation important?
When a company purchases equipment or major assets, they need to allocate the cost over the period of use. It’s not foolish to deduct the entire cost in the first year because the asset wi