Overview
Depreciation Index (DEPI), is a core indicator used to evaluate financial condition and operating performance. Quarterly (Q) scope increases short-term volatility visibility.
Formula
(Depreciation / (Depreciation + Property, Plant & Equipment)) prior period / (Depreciation / (Depreciation + Property, Plant & Equipment)) current period
How to Interpret
High Value
If Depreciation Index (DEPI) remains in this band, the market may reprice risk/return assumptions.
Low Value
A low Depreciation Index (DEPI) band may require a more conservative capital allocation stance.
Where It Is Used
Interpreting Depreciation Index (DEPI) with company-specific distribution ranges is usually more stable than relying only on sector average.