What Is Earnings Before Interest, Tax, Depreciation, Amortization & Rent (EBITDAR)

Patrick Curtis

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Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

EBITDAR stands for Earnings Before Interest, Taxation, Depreciation, Amortization and Rent. This is used over EBITDA when the firm in question has extremely high rental expenditure (airlines, shipping companies, generally anything which rents large amounts of capital). The reason for using this metric over EBITDA is that for the kind of companies in question, EBITDA alone will miss out a massive cost and thereby over-inflate earnings.

EBITDAR is not used for most companies as although they may have some rent costs (office space, parking etc) it is usually quite a small portion of costs. For airline and shipping companies (or any other which rents most of its capital), rent is likely to be one of if not the highest costs.

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Patrick Curtis

Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.