A financial performance measure that stands for earnings before interest, taxes, depreciation, amortization, rent and management fees. EBITDARM is used in comparison to more common measures such as EBITDA when a company's rent and management fees represent a larger-than-normal percentage of operating costs.


EBITDARM is not a measure in accordance with generally accepted accounting principles (GAAP), but is instead used for internal analysis and for presentation to investors and creditors. It is also reviewed by credit rating agencies when assessing a company's overall debt servicing ability and credit rating, which is an important factor, as many of the companies who present this measure carry high debt loads.

EBITDARM is most likely to be found in the statements of a healthcare company, such as a hospital or nursing facility operator. Industries such as these often lease the spaces they use, so rent fees can become a major operating cost. EBITDARM may be measured against rent fees to see how effective capital allocation decisions are within the company, and to review its ability to service debt.

Measures like EBITDARM are most informative to investors if they are examined in conjunction with net earnings and more refined non-GAAP measures like EBITDA and EBIT.

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  1. What's the difference between EBITDA, EBITDAR and EBITDARM?

    EBITDA, EBITDAR and EBITDARM are analytic indicators commonly used by management to evaluate the financial performance and ... Read Full Answer >>
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    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  3. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  4. How do dividends affect the balance sheet?

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  5. Are dividends considered an expense?

    Cash or stock dividends distributed to shareholders are not considered an expense on a company's income statement. Stock ... Read Full Answer >>
  6. Do dividends go on the balance sheet?

    The only account recorded on the balance sheet, when dividends are declared and before they are paid out to a company's shareholders, ... Read Full Answer >>

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