<p>EBITDAR, an acronym for Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent, is a key metric used in fundamental analysis to assess a company's operating performance. It's particularly useful for comparing companies with different capital structures or tax environments.</p>

<h2>How It Works</h2>
<p>EBITDAR is calculated as:</p>
<ul>
  <li>Operating Profit (Earnings Before Interest and Tax)</li>
  <li>Plus: Depreciation and Amortization</li>
  <li>Plus: Rent Expense</li>
</ul>
<p>Here's a simple example: If a company reports Operating Profit of $100,000, Depreciation of $30,000, and Rent Expense of $20,000, its EBITDAR would be $150,000.</p>

<h2>Why It Matters</h2>
<p>EBITDAR provides a more comprehensive view of a company's cash-generating ability than EBITDA alone, as it includes rent expense, which can be a significant cash outflow for some businesses, particularly in the retail and restaurant sectors. For instance, comparing two retail chains using EBITDAR can give a clearer picture of their financial health, as it accounts for their differing rent expenses.</p>