Income statement- amortization and depreciation

Question

I am teaching myself financial modelling and I am looking at income statements. I have come across tutorials that calculate EBITDA through the calculation:

Gross profit - SG&A

Underneath the EBITDA they have the amortization and depreciation in seperate rows. How do you find out what the values for amortization and depreciation are?

I have learnt that to get the value of EBIDTA, you do the calculation EBIT+(amortization/depreciation)

However I have so far not come across any income statement which provides amortization and depreciation.

Answer 1

Amortization/Depreciation will typically be found in the cashflow statement, because it is a non-cash item that gets removed from Net income, to find the true cash earnings for the year.

ie, something like:

Cash from operations
 1,000  Net Income
 200    Amortization
(100)  Change in working capital
-------
 1,100 Total Cash from Operations

Answer 2

If there is Depreciation (and/or Amortization) during the given period, it will be reflected on the Income Statement. If the income statement doesn't show EBITDA directly (and many don't, as it's not a GAAP measurement), then a common way to get to it is to work backward, starting with Net Income at the bottom, and then adding back in any expenses listed under Interest Expense, Taxes, or Depreciation/Amortization. This site has a useful explanation of Depreciation, with some example income statements.