The acronym EBITDAR stands for 'earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs.' It is used to assess a company's financial performance and profit potential when it is undergoing restructuring or when its rent expenses are higher than average.
To quantify a company's rent expenses, the EBITDAR formula is calculated by adding rent and reconstruction costs to its EBITDA. EBITDA is calculated by adding earnings before interest, taxes, depreciation, and amortization expenses to net income. As a result, the EBITDAR formula is as follows:
EBITDAR= EBITDA + restructuring or rent costs

EBITDAR stands for Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent. It is a financial metric used to evaluate a company's operational performance without the effects of its capital structure, tax rates, and significant non-cash expenses, as well as rent expenses. EBITDAR is particularly useful in industries where rent is a major expense, such as hospitality, retail, and airlines. By excluding rent, it provides a clearer picture of a company's profitability from its core operations. This metric helps investors and analysts compare companies within the same industry, as it normalizes differences in capital structure and leasing arrangements, offering a more standardized view of operational efficiency and profitability.