Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs

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Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) is a non-GAAP metric that can be used to evaluate a company's financial performance.

EBITDAR = revenue – expenses (excluding tax, interest, depreciation, amortization and rent costs)

EBITDAR can be of use when comparing two companies in the same industry with different structure of their assets. For example, consider two nursing home companies: one company rents its nursing homes and the other owns its homes and thus does not pay rent but instead has to make capital expenditures that are not necessarily of the same order of magnitude as the depreciation. By looking at EBITDAR, one can compare the efficiency of the companies' operations, without regard to the structure of their assets.

Some companies use an EBITDAR where "R" indicates "Rinel Costs". While this analysis of profits before restructuring costs is also helpful, such a metric should better be termed 'adjusted EBITDA'.

Related to EBITDAR is "EBITDAL", "rent costs" being replaced by "lease costs".

References

Investopedia definition of EBITDAR

This article is issued from Wikipedia - version of the 9/2/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.

Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs

See also

References