Depreciation is an income statement element that shows the actual cost of doing business since it reflects how much specific machinery wears out through time.
The companies with a moat around them usually have lower depreciation costs as a percentage of gross profit than the average companies.
The chart below shows Coca-Cola's depreciation to gross profit ratio from 2012-2022. It shows during these ten years; it fluctuates between 5% and 8%.
The chart below shows PepsiCo's depreciation to gross profit ratio, which decreased from 2012 to 2019. After that, it started to increase again by 2021; however, in 2022, it dropped again and was realized at about 7% in 2022.
Looking at only this ratio, I prefer buying Coca-Cola's stock above PepsiCo's.
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