Accountants use amortization to spread out the costs of an asset over the useful lifetime of that asset. The formula to calculate the monthly principal due on an amortized loan is as follows ...

Using the straight-line formula, ($10,000,000 – $0) / 5 = $2,000,000, $2 million is the amortization expense per year.

What makes a stock overvalued or undervalued? Financial metrics like earnings before interest, taxes, depreciation and amortization, or EBITDA, help investors determine a company's valuation and ...