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Copart, Inc. Message Board

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  • shortofaname_99 shortofaname_99 Jun 4, 2008 8:57 AM Flag

    Weak results under the surface

    I'm afraid that is not an adequate explanation. Obviously, assets coming off decrease depreciation, but if a company is rapidly buying new assets, then those should be getting included in depreciation. So the net result when a company is growing PP&E is that depreciation goes up. The ratio of depreciation to PP&E should not be coming down. It's almost unheard of to see depreciation going down while PP&E is going up. See if you can find any other example of this happening.

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    • 2 Things could be at play here:

      1) Different depreciation standards for UK assets bought in last 12 months.

      2) Large CAPEX purchase in last month of quarter

      Since PP&E is a snapshot in time, if I buy $10M on April 30th, my PP&E # will go up $10M, but I won't have any increase in depreciation until following quarter.

 
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