EBITDARM
 |
Definition of 'EBITDARM'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. |
 |
Investopedia explains 'EBITDARM'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. |
Related Definitions
Articles Of Interest
-
How To Evaluate The Quality Of EPS
Companies can manipulate their numbers, so you need to learn how to determine the accuracy of EPS. -
EBITDA: Challenging The Calculation
This measure has a bad rap, but it's still a valuable tool when used appropriately. -
What Is A Corporate Credit Rating?
Is the bond you're buying investment grade, or just junk? Find out how check the score. -
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 resource allocation for operating units within a company. These tools ... -
Pay Attention To The Proxy Statement
Don't overlook this overview of a company's well-being. -
How Risk Free Is The Risk-Free Rate Of Return?
This rate is rarely questioned - unless the economy falls into disarray. -
Top 4 Most Scandalous Insider Trading Debacles
Here we look at some of the landmark incidents of insider trading. -
Explaining Amortization In The Balance Sheet
Amortization is important to account for intangible assets. Read to find out more about amortization. -
Nobel Winners Are Economic Prizes
Before you try to profit from their theories, you should learn about the creators themselves. -
The Copper King: An Empire Built On Manipulation
Find out how Yasuo Hamanaka's actions in the copper market forever changed the rules for commodity traders.
Free Annual Reports