EBITDAR
Calculate EBITDAR and test rent cover for an operational care asset.
Introduction
Who this is for: Investors and lenders assessing care homes and other operationally-leased assets.
Why it matters: EBITDAR adds rent back to EBITDA, letting you compare operators regardless of whether they own or lease their property. For a landlord, the critical number is rent cover — EBITDAR divided by rent. Below about 1.5x, the operator is fragile and the income is at risk.
Typical scenario: A landlord assessing whether a care operator can sustainably pay £850,000 rent.
- Comparing EBITDA across operators where some own freeholds and some pay rent.
- Ignoring agency staffing costs, which can swing care home margins dramatically.
- Accepting rent cover near 1.0x — that leaves no headroom for occupancy or wage shocks.
Inputs
Trading
beds
Costs
Analysis
68 beds at 88% occupancy and £1150/week produce £3,578,432 revenue. After staff and operating costs, EBITDAR is £858,824 — a 24.0% margin. Against £850,000 rent, cover is 1.01x, and the home breaks even at 87.1% occupancy.
This analysis provides context, not financial advice. Consult a qualified adviser before making investment decisions.
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Sensitivity
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Live Results
EBITDAR
£858,824
Rent Cover
1.01x
EBITDA (after rent)
£8,824
EBITDAR Margin
24.00%