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{{this}} measures the average accumulated depreciation for investments made in [[Link::t:PP&E|Property, Plant and Equipment (PP&E)]] (calculating the average of beginning and year-end accumulated depreciation).
===Calculation===
{{math|Asset Depreciation|{{frac|Beginning Asset Depreciation + Ending Asset Depreciation|2}}}}
where
* Beginning Asset Depreciation = Value of Assets Depreciation at the start of the reporting period
* Ending Asset Depreciation = Value of Assets Depreciation at the end of the reporting period
Unit of measure: MU (Monetary Unit)
===Importance===
Companies or supply chains with a low {{this}} are desirable. An increase over time can be indicative of a problem: Insufficient cash is generated to replace aging equipment. It's also important to assess the company's value versus a benchmark, since ratios may be indicative of the durability of the assets within an industry.

In order to understand what constitutes good or bad {{this}} it should always be compared to industry standards and the ratios of other companies that are similar in size.
===Notes===
Accumulated Asset Depreciation:
* Includes only the accumulated depreciation for [[Link::t:PP&E|Property, Plant and Equipment (PP&E)]] the company currently owns
* Includes only the portion of the accumulated depreciation for assets allocated to the supply chain
[[Category:Metric]]
{{Object
|name=Asset Depreciation Ratio
|parent=m:AE2
|sort=52200
|level=2
}}

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Orwiki: 1 revision imported