Depreciation spreads the cost of a physical asset (equipment, furniture, a vehicle) over its useful life instead of expensing it all at once. Amortization does the same thing for intangible assets, like a patent or acquired software.
Buying a $50,000 piece of equipment doesn't show up as a $50,000 expense in the month it's purchased. Instead, it's capitalized as an asset on the balance sheet and expensed gradually over its estimated useful life, say $10,000 a year for five years, matching the cost to the periods the asset actually helps generate revenue.
Depreciation and amortization are non-cash expenses: they reduce reported profit without any cash actually leaving the bank in that period, since the cash left when the asset was originally purchased. That's exactly why they get added back when calculating EBITDA and why the cash flow statement treats them differently from a real cash expense.
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