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How does the amortization method used ( straight line, unit-of-production and DDB) to calculate accumulated amortization effect a company's cash flows, asset turnover ratio, earnings
How does the amortization method used ( straight line, unit-of-production and DDB) to calculate accumulated amortization effect a company's cash flows, asset turnover ratio, earnings per share(EPS) ? Which method would be recommended for a company looking to minimize income tax and maximize EPS? PLEASE EXPLAIN YOUR ANSWER What I already understand is that cash flows aren't affected by amortization (not paid in cash). Also, because amortization expense (AE) is added back to the net income for tax purposes, the calculation of net income (after tax) should not be affected by how much AE was (EPS = net income/ # of shares) - Right
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