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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
               THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED).

                   For the fiscal year ended December 31, 1996

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
             THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED).

                           Commission File No. 1-14146

                       CORT BUSINESS SERVICES CORPORATION
             (Exact name of registrant as specified in its charter)

           Delaware                                      54-1662135
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

  4401 Fair Lakes Court, Fairfax, VA                      22033
(Address of principal executive offices)                (Zip Code)

                                 (703) 968-8500
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

     Title of each class               Name of each exchange on which registered
         Common  Stock                         New York  Stock  Exchange

           Securities registered pursuant to Section 12(g) of the Act:
                                      None

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes  X         No
                                              ---          ---

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S- K is not contained herein,  and will not be contained,
to the best of the  registrants'  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. Yes            No  X
                                 ---           ---

         Non-affiliates  of CORT Business  Services  Corporation  held 6,507,116
shares of Common Stock as of March 20, 1997.  The fair market value of the stock
held by non-affiliates is $156,170,784  based on the sale price of the shares on
March 20, 1997.

       As of March 20, 1997, 12,777,480 shares of Common Stock, par value
                             $.01, were outstanding.
                      Documents Incorporated by Reference:

                    Document                            Part of Form 10-K
                    --------                            -----------------
Annual Report to Stockholders for the fiscal year
           ended December 31, 1996                           Part II
   Proxy Statement for the Annual Meeting of
    Stockholders to be held May 14, 1997                     Part III

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<PAGE>

                                     PART I
ITEM 1.  Business

Overview

CORT  Business  Services  Corporation  (the  "Company"  or "CORT")  through  its
wholly-owned subsidiary CORT Furniture Rental Corporation ("CFR") is the leading
national provider of rental  furniture,  accessories and related services in the
growing and fragmented  "rent-to-rent" segment of the furniture rental industry.
The  "rent-to-rent"  segment serves both corporate and individual  customers who
desire  flexibility to meet their temporary and transitional  needs. The Company
focuses on corporate customers by offering office and residential  furniture and
related   accessories   through  a  direct  sales  force  of  approximately  650
salespeople  and a network of 108  showrooms  in 31 states and the  District  of
Columbia.  The Company believes that  approximately 80% of its rental revenue is
derived from its corporate customers, while the remainder is derived principally
from rentals to middle- and upper-income level individuals.  Management believes
that the Company's  focus on corporate  and  upper-income  individual  customers
allows it to maintain a  high-quality  lease  portfolio,  which  contributes  to
generally  higher operating  margins than those of its competitors.  The Company
maintains the showroom quality  condition of its merchandise  available for rent
by  selling  its  previously  rented   merchandise   through  a  network  of  69
company-operated  clearance  centers,  thereby enabling the Company to regularly
update its  inventory  with new styles and new  merchandise.  Sales of furniture
through clearance centers, at prices which for the last five years have averaged
110% of the  furniture's  original  cost,  allow the  Company  to  maximize  the
residual  value of its rental  merchandise.  Furniture  sales through  clearance
centers and other sales accounted for  approximately  18% of the Company's total
1996 revenue.

As the industry leader and the only "rent-to-rent" furniture rental company with
a national presence, CORT is well-positioned to take advantage of growing demand
for furniture rental services. This demand is believed to be driven by continued
growth in management and professional  employment,  the increasing importance to
American business of flexibility and outsourcing and the impact of a more mobile
and transitory  population.  The Company is called upon to meet business-related
furniture  rental  service  needs by a corporate  customer  base which  includes
Fortune  500  companies,  small  businesses  and  professionals,  and owners and
operators of apartment communities.

Management believes that annual revenues of the "rent-to-rent"  furniture rental
industry are in excess of $700 million. A significant  portion of these revenues
is generated by  single-location  and small  regional  rental  businesses  which
present  attractive  consolidation  opportunities for the larger  "rent-to-rent"
furniture  rental  companies  such as CORT.  Since the  beginning  of 1992,  the
Company has  acquired  two of its  significant  competitors,  General  Furniture
Leasing Company ("General  Furniture") and Evans Rents, entered two new markets,
New York  City and Salt  Lake  City,  through  portfolio  acquisitions,  and has
completed and  successfully  integrated 13 small lease  portfolio  acquisitions.
Management believes that CORT is well-positioned to continue capitalizing on the
consolidation  trend in the "rent-to- rent" furniture rental industry due to its
national presence, leading market share and financial capacity.

The Company's  total  revenue  increased  21.7% on an annual basis,  from $106.5
million in 1992 to $234.1  million in 1996, as a result of the  acquisitions  of
General  Furniture and Evans Rents,  small lease portfolio  acquisitions and new
showroom openings, as well as growth in existing operations.  Operating earnings
increased 27.2% on an annual basis from $13.5 million  (excluding  non-recurring
charges of $10.0 million) in 1992 to $35.4 million in 1996.

Business Strategy

Management believes that CORT's size, national presence, consistently high-level
customer  service,  product  quality  and  broad  product  selection,  depth  of
management and efficient  clearance  centers have been key  contributors  to the
Company's success. The Company's objective is to build on these fundamentals and
increase  further its revenue and  operating  earnings and expand its margins by
continuing to pursue its growth  strategy.  The key  components of this strategy
are (i) making selective acquisitions; (ii) initiating operations in new markets
and adding showrooms in existing markets; (iii) expanding its corporate customer
base on the rental of high-margin office furniture products; and (iv) continuing
to invest in the development of various products and services.

                                      - 1 -

<PAGE>

Acquisitions

The primary focus of the Company's growth strategy has been and will continue to
be the selective acquisition of small lease portfolios and regional companies in
new and existing markets. Since the beginning of 1992, the Company has completed
15 small lease portfolio acquisitions. In a typical lease portfolio acquisition,
the Company acquires  existing leases and rental  furniture.  Additionally,  the
Company  may  also  retain   sales   personnel   with  strong   local   customer
relationships.  The Company generally does not acquire  showrooms,  distribution
facilities or clearance  centers in existing markets.  However,  in new markets,
the Company may choose to retain such real  estate.  The Company  also  believes
that  there are a select  number of  opportunities  to acquire  larger  regional
companies  in order to enter  new  markets  and  increase  its  market  share in
existing  markets.  For example,  the Company has  acquired two larger  regional
companies:  General  Furniture in September  1993,  which had total  revenues of
approximately $41.5 million for fiscal year 1992, and Evans Rents in April 1996,
which had total  revenues of  approximately  $30.5 million for fiscal year 1995.
The acquisition of General Furniture  provided CORT with immediate access to new
market areas and  additional  critical mass in CORT's  existing  markets.  Evans
Rents provides CORT with additional critical mass in the greater Los Angeles and
San Francisco areas, increases the percentage of rental revenue derived from the
rental of  higher-margin  office furniture  products and contributed  additional
expertise in the supply of furniture for trade shows and conventions.

New Markets and Additional Showrooms

The Company  continues  to expand the number of  showrooms  within its  existing
markets as well as initiate new operations,  including  showrooms,  distribution
facilities  and  clearance  centers,  in  strategically   identified  geographic
locations  where it currently  does not conduct  business  and where  attractive
acquisition  opportunities  do not exist.  By increasing the number of showrooms
associated  with existing  distribution  facilities and clearance  centers,  the
Company is able to distribute  its real estate,  personnel and other fixed costs
over a  larger  revenue  base.  Since  the  beginning  of 1995,  CORT has  begun
operations in four new metropolitan  markets:  Birmingham,  AL; Little Rock, AR;
Portland, OR; and St. Louis, MO.

Expanded Corporate Customer Base

The Company seeks to increase its corporate customer base in order to capitalize
on the longer lease  terms,  higher  average  lease  amounts and multiple  lease
transactions  associated  with  corporate  customers.  In  addition,   corporate
customers more frequently enter into higher-margin  office furniture leases. The
Company  intends to grow  revenue by  increasing  its  corporate  customer  base
through expanded  emphasis on national  accounts,  further  development of sales
personnel with business-to-business  sales experience and continued advertising.
The Company intends to increase  awareness among its sales force of the benefits
and breadth of its office product  offerings  through expanded training programs
and to focus the  efforts  of its sales  force on these  products  by  increased
incentive compensation for office product rentals.

Development of Products and Services

The  Company  continues  to  invest in the  development  of other  products  and
services.  Products and services in various  stages of  development  include the
rental of houseware amenity packages, interior design services and furniture for
model  homes  and the  supply of  furniture  for  trade  shows and  conventions.
Management  believes that the gradual  introduction of new products and services
allows the Company to experiment with such products and services at a relatively
low initial cost. See "Products--Other Products and Services."

The "Rent-to-Rent" Industry

The  "rent-to-rent"  segment  of  the  furniture  rental  industry  serves  both
corporate and individual customers who generally have immediate, temporary needs
for office or residential  merchandise but who typically do not seek to own such
merchandise.  Office product customers range from large  corporations who desire
flexibility to meet their temporary and transitional  needs, to small businesses
and professionals who require office furnishings but seek to

                                      - 2 -

<PAGE>

conserve capital.  Residential product customers include corporations seeking to
provide  furnishings for corporate  employees who have been relocated or who are
on  temporary  assignment,  apartment  community  managers  seeking  to  provide
furnished  apartments and individual  residents  seeking to rent merchandise for
their own homes and apartments.

Management  believes the  "rent-to-rent"  furniture rental industry generates in
excess of $700  million of annual  revenue.  The demand for rental  products  is
believed  to be  driven  by  continued  growth in  management  and  professional
employment levels, the changing trends in American business towards  flexibility
and outsourcing and the impact of a more mobile and transitory  population.  The
industry  is  highly   competitive  and  consolidating  with  many  participants
operating single locations and small regional businesses. See "Competition."

The "rent-to-rent"  business is differentiated  from the "rent-to-own"  business
primarily  by the  terms of the  rental  arrangements  and the type of  customer
served. "Rent-to-rent" customers generally desire high quality furniture to meet
temporary needs, have established credit, and pay on a monthly basis. Typically,
these  customers  do not seek to acquire  the  property  rented.  In the typical
"rent-to-rent" transaction, the customer agrees to rent merchandise for three to
six months,  subject to extension by the customer on a month-to-month  basis. By
contrast,  "rent-to-own"  arrangements  are generally made by customers  without
established  credit  whose  objective is to acquire  ownership of the  property.
"Rent-to-own"  arrangements are typically entered into on a month-to-month basis
and require weekly rental payments.

Products

The Company rents a full line of furniture and accessories throughout the United
States for office and residential purposes. The Company classifies its furniture
leases  based  on the  type of  furniture  leased  and the  expected  use of the
furniture.

Office Products

In order to capitalize on the significant  profit  potential  available from the
longer average  rental  periods and the higher  average  monthly rent for office
products,  the Company's strategy is to emphasize office furniture rentals.  The
Company  offers a full  range of  office,  conference  room and  reception  area
furniture,  including  desks,  chairs,  tables,  credenzas,  panel  systems  and
accessories.  In order to promote longer office lease terms,  the Company leases
furniture to its  corporate  customers at rates that reflect a premium on leases
that are less than six months and a discount on leases of more than six months.

The Company's office furniture  customers  consist  primarily of large companies
that desire flexibility to satisfy temporary and transitional needs and small or
start-up businesses that have immediate and changing furniture  requirements but
seek to minimize capital outlay. The Company emphasizes its ability to outfit an
entire office with high quality  furniture in two business  days, as well as its
ability to provide consistent customer service and product quality nationwide.

Residential Products

The  Company  leases  residential   products  to  corporate  customers  who  are
temporarily  or  permanently  relocating  employees,  to apartment  managers and
owners who are providing furnished apartments and to individual end users of the
furniture.  The Company offers a broad range of household  furniture,  including
dining  room,  living room and  bedroom  pieces,  as well as certain  electronic
products.

A significant portion of the Company's residential furniture rentals are derived
from corporate  relocations  and temporary  assignments,  as new and transferred
employees of the Company's corporate customers enter into leases for residential
furniture.  The Company's  sales  personnel  maintain  contacts  with  corporate
relocation   departments.   By   presenting   the   possibility   of   obtaining
fully-furnished   rental  apartments  as  a  lower  cost  alternative  to  hotel
accommodations,  the  Company  offers its  corporate  rental  customers a way to
reduce the costs of corporate relocations

                                      - 3 -

<PAGE>



while developing  residential business with new and transferred  employees.  The
Company's ability to service both corporate and individual needs creates a broad
corporate customer base accompanied by an increasing pool of employees utilizing
the Company's residential services.

Other Products and Services

CORT offers several other products and services in selected markets. The Company
offers houseware amenity packages (such as linens, towels, dishes,  cookware and
other kitchen,  bedroom and bath  accessories)  for rent to its furniture rental
customers.  The Company had generally  distributed  houseware  amenity  packages
through third-party contractors either under subcontract  arrangements or direct
referrals. The Company continues to expand the distribution of its own houseware
amenity   packages  to  capture  profits   currently   accruing  to  third-party
contractors  and  made a lease  portfolio  acquisition  in 1996 of a  housewares
rental business. In addition, CORT currently offers interior design services and
furnishings for model home builders in three major metropolitan areas.

The Company has been providing rental specialty  furniture for short term use at
trade  shows and  conventions  through  its  operations  in New  Orleans and the
California  operations  acquired  with Evans Rents.  In March 1997,  the Company
completed its  acquisition of three trade show services  businesses that operate
in nine major  markets.  The  combination  of CORT's  national  network with the
experience of these organizations  should provide the Company with a competitive
advantage in the trade show and convention services business.

Operations

Lease Terms

The Company typically leases furniture to individuals and corporate accounts for
three-,  six- and twelve-month terms, which may be and often are extended by its
customers on a  month-to-month  basis.  Management  believes  that,  on average,
furniture  remains on lease for  approximately  nine months at a time.  Although
rental  contracts  may give the customer the option to purchase the  merchandise
rented,  only a small percentage of the Company's rental leases lead to customer
ownership.

The  Company's  strategy is to price rentals to recover the original cost of the
furniture over a ten-month rental "payout period."  However,  pricing and payout
periods often vary with the length of the leases. The Company frequently charges
a delivery fee and, in the absence of proof of insurance,  a waiver fee.  Within
general  company  guidelines,  each district has  discretion to set prices based
upon local market factors.

The Company may also require a security  deposit  from a customer  which will be
returned at the end of the lease upon satisfactory  compliance with the terms of
the lease. The Company requires  applications from prospective  rental customers
and performs credit investigations  before approving such applications.  In each
of the last five years,  the Company's bad debt losses have been limited to 0.5%
of revenue or less.

Customer Services

CORT is dedicated  to  providing  consistently  high  quality  customer  service
nationwide  to its  corporate  and  individual  customers.  Through its national
network,  the  Company  more  efficiently  services  its  corporate  clients  by
providing a single point of contact for  customers who have  furniture  needs in
multiple locations,  offering consistent quality of products and services at all
CORT  locations,  and offering a broad spectrum of products to customers.  Under
its Personal Service  Guaranty,  which  management  believes is the only written
service  guarantee  of its kind in the "rent-  to-rent"  industry,  the  Company
ensures  customers of CORT Furniture Rental that they will be satisfied with the
furniture they rent or the Company will exchange it for similar furniture within
two business days free of charge.  Additionally,  the Company's employees assist
customers with space planning, interior design and apartment location services.


                                      - 4 -

<PAGE>

Furniture Sales

For the last five years,  the Company  has  derived 72% of its  furniture  sales
revenue from clearance  centers sales. The remaining  furniture sales revenue is
derived  primarily from lease  conversions and sales of new furniture.  Sales of
rental  furniture  allow the Company to control  inventory  levels and  maintain
showroom quality of rental  inventory.  On average,  furniture is typically sold
through the  clearance  centers  three  years after its initial  purchase by the
Company.  For the  last  five  years,  sales of  rental  furniture  through  the
clearance  centers have had an average  recovery  margin on the original cost of
furniture of  approximately  110%, a price which is usually  considerably  lower
than the price of  comparable  new  merchandise.  Management  believes  that its
ability to recover the  original  cost of its  furniture  through its  clearance
centers is a key contributor to the Company's profitability.

                            Cost Recovery Ratio Table
                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                                  Year Ended December 31,
                                           -----------------------------------------------------------------
                                              1992        1993(1)          1994           1995       1996(2)
                                              ----        -------          ----           ----       -------
<S>                                        <C>            <C>           <C>            <C>           <C>
Clearance Center sales revenue......       $18,226        $22,490       $26,136        $26,021       $28,714
Original cost of furniture..........        16,517         20,067        23,651         23,666        26,137
Cost recovery ratio.................        110.3%         112.1%        110.5%         110.0%        109.8%
<FN>
--------

(1)    Includes  four months of combined  data  pursuant to the  acquisition  of
       General Furniture.

(2)    Includes  Evans Rents  subsequent to its  acquisition  on April 24, 1996;
       however, Evans Rents did not operate Clearance Centers.
</FN>
</TABLE>


                               Cost of Sales Table
                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                           -----------------------------------------------------------------
                                              1992        1993(1)          1994           1995       1996(2)
                                              ----        -------          ----           ----       -------
<S>                                        <C>            <C>           <C>            <C>           <C>
Cost of Clearance Center sales......       $10,452        $13,354       $15,371        $15,060       $16,447
Cost of other furniture sales.......         3,024          3,456         5,278          7,143         8,760
                                             -----          -----         -----          -----         -----
Total Cost of Sales.................       $13,476        $16,810       $20,649        $22,203       $25,207
                                            ======         ======        ======         ======        ======
<FN>
------------

(1)    Includes  four months of combined  data  pursuant to the  acquisition  of
       General Furniture.

(2)    Includes  Evans Rents  subsequent to its  acquisition  on April 24, 1996;
       however, Evans Rents did not operate Clearance Centers.
</FN>
</TABLE>


Sales, Marketing and Advertising

The  Company  employs  a sales  force of  approximately  650  people,  including
managers and supervisors,  rental  consultants,  commercial account  executives,
residential  account  executives,  and clearance center  personnel.  In general,
rental consultants  service walk-in showroom  customers,  clearance center sales
personnel are responsible for

                                      - 5 -

<PAGE>

walk-in  clearance  center  customers and  commercial  and  residential  account
executives work to develop office and residential  customers in their districts.
Utilizing the Company's national  distribution  network to emphasize its ability
to serve  customers  throughout  the country,  the Company  employs ten national
account  representatives who are responsible for customers with business in more
than one district.

CORT's sales representatives  receive professional,  business-to-business  sales
training through the Company's CORT University  program,  which was developed as
part of the Company's  continuing  effort to increase rental revenue and improve
customer service.  Management  believes that the program's emphasis on a problem
solving,  value-added approach to clients' needs enhances its relationships with
customers  and  provides  CORT with a  competitive  advantage  in  marketing  to
corporate customers.

The Company markets its services  through  brochures,  newspapers,  periodicals,
yellow pages, radio,  television and direct response media and over the internet
(http://www.cort1.com).  The Company  designs its  advertising  program  both to
promote the business and to increase  awareness of the  advantages of renting in
the  residential  and office  furniture  markets.  The Company also supports its
clearance center sales through newspaper, radio and television advertising.

Purchasing and Distribution

The Company has a national product line chosen by its merchandising  group. Each
district  manager,  in  consultation  with  his  or her  regional  merchandising
manager, selects from the national product line based on an analysis of customer
demand within such manager's specific market. Each district then places purchase
orders directly with the Company's  vendors and shipment is arranged through the
Company's freight analyst directly to the district warehouse.

The Company acquires  furniture from a large number of manufacturers  and is not
dependent on any  particular  manufacturer  as a source of supply.  In 1996,  no
furniture  manufacturer  accounted for more than 10% of the Company's  furniture
purchases. Management believes that the Company is able to purchase furniture at
lower  prices  than its  competitors  due to the  centralized  selection  of its
product line and large  volume of  purchases.  The Company is generally  able to
obtain prompt  delivery of furniture from its suppliers and has not  experienced
material  interruptions  in its  business  resulting  from  delays in  acquiring
furniture.

Merchandise is delivered to rental  customers by Company  employees via owned or
leased trucks after a rental agreement has been signed.  At the end of the lease
term,  rental  furniture  is returned to the  Company's  warehouses  where it is
inspected,  cleaned and/or repaired in preparation for future rental or sale. If
it is determined  that the furniture is appropriate  for sale rather than future
rental,  the  furniture  is then  transferred  to a  clearance  center.  Company
warehouses are typically  located next to a clearance  center,  thereby allowing
the Company to reduce shipping expenses and realize efficiency gains.

Competition

The   "rent-to-rent"   segment  of  the  furniture  rental  industry  is  highly
competitive.  Management believes that Aaron Rents, Globe Business Resources and
Brook  Furniture  Rental are the  Company's  most  significant  competitors.  In
addition, there are numerous smaller regional and local "rent-to-rent" furniture
companies  as well as  retailers  offering  residential  and  office  furniture.
Management  believes  that the  principal  competitive  factors in the furniture
rental  industry are product  value,  furniture  condition,  extent of furniture
selection,  terms of rental agreement,  speed of delivery,  exchange  privilege,
option to purchase, deposit requirements and customer service level.

With respect to sales of furniture  through its clearance  centers,  the Company
competes  with  numerous  used and new  furniture  retailers,  some of which are
larger  than  the  Company  and have  greater  financial  resources.  Management
believes  that  price and value are the  principal  competitive  factors  in its
furniture sales.



                                      - 6 -

<PAGE>

Employees

On December 31, 1996, the Company employed  approximately  2,000 people, of whom
approximately  50 were  employed at corporate  headquarters.  Approximately  650
people were employed as salespersons,  975 people were employed in the warehouse
and  distribution  portion of the  business  and the  remainder  in district and
regional administrative positions.

The Company's  warehouse and delivery  employees in Maryland  (approximately  37
persons) are represented by an independent  union under a contract which expires
in December  1999.  Additionally,  16 of the  Company's  warehouse  and delivery
employees in New York City are represented by the Local 840 of the International
Brotherhood of Teamsters under a contract which expires in June 1999.

The Company believes that its relationships with its employees are good.

Trademarks and Name Recognition

The Company  engages in  business  under the CORT  Furniture  Rental and General
Furniture  Leasing  tradenames,  each of which  has been  used in the  furniture
rental business for over 20 years. The Company has established its reputation as
a provider of quality  furniture  and customer  service  using these names.  The
Company feels that  reputation and name  recognition are important to customers.
Therefore,  following  an  acquisition  in a new  market,  the Company may use a
combination  of the  CORT  and  acquired  business  name  to  maintain  customer
recognition, i.e.  CORT/EVANS,  CORT/afr,  CORT/bel style.

Regulatory Matters

Compliance  with  federal,  state  and  local  laws  and  regulations  governing
pollution and protection of the environment is not expected to have any material
effect upon the financial condition or results of operations of the Company.

ITEM 2.  Properties

As of December 31, 1996, the Company carried out its rental, sales and warehouse
operations  through 140 facilities,  of which 22 were owned and 118 were leased.
The leased  facilities have lease terms with expiration  dates ranging from 1997
to 2010. Upon the expiration of its leases,  the Company generally has been able
to either  extend  its  leases  or obtain  suitable  alternative  facilities  on
satisfactory  terms.  Management seeks to locate properties in new markets where
rental,  clearance and warehouse operations can be combined in one facility.  As
the  Company  expands  in a  particular  district,  the  Company  seeks  to open
free-standing showrooms that can be serviced from pre-existing  warehouses.  The
Company's  showrooms  generally  have 3,500 to 4,500 square feet of floor space.
The Company  regularly  reviews the presentation and appearance of its furniture
showrooms and clearance centers and periodically improves or refurbishes them to
enhance their attractiveness to customers.

The Company's decision to enter a new market is based upon its review of current
demographic  information,  short-and  long-term  population and business  growth
projections and the level of existing competition.  Once the decision is made to
enter  a  new  market,  management  selects  individual  showroom  locations  by
reviewing demographic information, accessibility,  visibility, customer traffic,
location of competitors and cost.

The metropolitan  areas in which the Company operates,  together with the number
of showrooms in each metropolitan area, are set forth in the table below:


               District Locations                           Number of Showrooms
-----------------------------------------------             --------------------
ALABAMA                            Birmingham                         1
ARIZONA                            Phoenix                            1
ARKANSAS                           Little Rock                        1


                                      - 7 -

<PAGE>



                District Locations                           Number of Showrooms
------------------------------------------------             -------------------
CALIFORNIA                        Orange County                      3
                                  Los Angeles                        6
                                  Sacramento                         1
                                  San Diego                          1
                                  San Francisco                      5
                                  Santa Clara                        2
COLORADO                          Denver                             2
DISTRICT OF COLUMBIA              (1)                                6
FLORIDA                           Ft. Lauderdale                     4
                                  Jacksonville                       2
                                  Orlando                            3
                                  Pensacola                          1
                                  Tampa                              4
GEORGIA                           Atlanta                            6
ILLINOIS                          Chicago                            3
INDIANA                           Indianapolis                       1
KANSAS                            Kansas City                        1
KENTUCKY                          Louisville                         2
LOUISIANA                         Baton Rouge                        2
                                  New Orleans                        1
MASSACHUSETTS                     Boston                             3
MICHIGAN                          Detroit                            3
MINNESOTA                         Minneapolis                        4
MISSOURI                          St. Louis                          1
NEW MEXICO                        Albuquerque                        1
NEW YORK                          New York                           1
NORTH CAROLINA                    Raleigh                            2
                                  Charlotte                          1
OHIO                              Cincinnati                         2
                                  Columbus                           1
OKLAHOMA                          Oklahoma City                      1
                                  Tulsa                              1
OREGON                            Portland                           1
PENNSYLVANIA                      Philadelphia(2)                    4
TENNESSEE                         Memphis                            1
                                  Nashville                          1
TEXAS                             Austin                             2
                                  Corpus Christi                     1
                                  Dallas                             4
                                  Houston                            4
                                  San Antonio                        3
UTAH                              Salt Lake City                     1
VIRGINIA                          Richmond                           1
                                  Virginia Beach                     2
WASHINGTON                        Seattle                            3
                                                                    ---
   TOTAL                                                            108
-------

(1)    Includes locations in Washington, D.C., Maryland and Virginia.

(2)    Includes locations in Pennsylvania, New Jersey and Delaware.


                                      - 8 -

<PAGE>



The Company  distributes its furniture using a fleet of approximately 188 leased
and 33 company-owned delivery trucks. The trucks are usually rented for a period
of five to six  years  under  operating  leases  and  typically  display  CORT's
tradenames.

ITEM 3.  Legal Proceedings

At December 31,  1996,  the Company was  involved in certain  legal  proceedings
arising in the normal course of its business.  The Company  believes the outcome
of these  matters will not have a material  adverse  effect on the Company.  The
Company has  undergone  an  examination  of its  Federal  income tax returns and
reached a settlement in early 1997.  See Item 7 -  Management's  Discussion  and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources and Item 8 - Financial Statements and Supplementary Data.

ITEM 4.  Submission of Matters to a Vote of Security Holders

None

ITEM 4a.  Directors and Executive Officers of the Registrant

The names of the executive  officers and directors of CORT and their  respective
ages and positions with CORT are set forth in the following table. Directors are
elected at the annual  meeting of  stockholders  to serve  until the next annual
meeting and until their successors are elected and qualify.

Name                       Age     Position
----                       ---     --------
Paul N. Arnold(3)          50      President, Chief Executive Officer & Director
Anthony J. Bellerdine      48      Group Vice President
Michael G. Connors         40      Vice President--Real Estate
Charles M. Egan(3)         60      Chairman & Director
Kenneth W. Hemm            42      Group Vice President
Steven D. Jobes            47      Vice President--Marketing, Merchandising,
                                     Sales & National Accounts
Lloyd Lenson               46      Group Vice President
Frank Martini              48      Group Vice President
Victoria L. Stiles         42      Vice President--Human Resources & Corporate
                                     Risk Management
Maureen C. Thune           31      Controller & Assistant Secretary
Frances Ann Ziemniak       46      Vice President--Finance, Chief Financial
                                     Officer & Assistant Secretary
Keith E. Alessi(2)         42      Director
Bruce C. Bruckmann(1)(2)   43      Director
Michael A. Delaney(1)      42      Director
Gregory B. Maffei(2)       36      Director
James A. Urry(1)           43      Director

------------
(1)    Member of Compensation Committee
(2)    Member of Audit Committee
(3)    Member of Directors Stock Option Committee

PAUL N. ARNOLD, President,  Chief Executive Officer and Director. Mr. Arnold has
been with CORT and Mohasco Corporation,  its former parent, for 28 years and has
held group management  positions within CORT since 1976. He has held his current
position since July 1992.

ANTHONY J. BELLERDINE,  Group Vice President.  Mr. Bellerdine has been with CORT
since July 1991.  He was  appointed to Group Vice  President  in December  1994,
having served as Area Vice President and Senior District

                                      - 9 -

<PAGE>



Manager.  Prior to joining CORT,  Mr.  Bellerdine  was Senior Vice  President of
Sales and Marketing of Stern Office Furniture for eight years.

MICHAEL G. CONNORS,  Vice  President--Real  Estate.  Mr.  Connors joined CORT in
February 1986,  after nearly eight years in Real Estate and Marketing with Mobil
Oil Corporation and has served in his current position since March 1991.

CHARLES M. EGAN,  Chairman and  Director.  Mr. Egan has been with CORT since the
acquisition of General  Furniture  Leasing  Company in September  1993. Mr. Egan
joined General  Furniture  Leasing  Company in 1989 and became its President and
Chief Executive  Officer in 1992. From 1985 to 1989, Mr. Egan was Executive Vice
President of Mohasco  Corporation.  Mr. Egan was  President of CORT from 1980 to
1985.

KENNETH W. HEMM, Group Vice President. Mr. Hemm has been with CORT for 16 years.
He was  appointed  Group Vice  President  in June 1992,  having  served as Group
Manager since January 1991.

STEVEN D. JOBES, Vice  President--Marketing,  Merchandising,  Sales and National
Accounts.  Mr.  Jobes has been with CORT for 25 years and  served as Group  Vice
President prior to assuming his current position in May 1993.

LLOYD LENSON,  Group Vice President.  Mr. Lenson has been with CORT for 18 years
serving in his current  position  since May 1993. He previously  served as Group
Vice President and as Vice President--Marketing, Sales and Acquisitions.

FRANK MARTINI, Group Vice President. Mr. Martini has been with CORT for 20 years
serving in his current  position  since July 1994. He previously  served as Area
General Manager and District General Manager.

VICTORIA  L.  STILES,  Vice   President--Human   Resources  and  Corporate  Risk
Management. Ms. Stiles joined CORT in November 1987, after nearly eight years in
Personnel for the Hecht Company a division of the May Company. She was appointed
to Vice President in July 1996, having served as Director of Human Resources and
Regional Manager of Human Resources.

MAUREEN C. THUNE,  Controller and Assistant Secretary.  Ms. Thune joined CORT in
August 1992 after five years with KPMG Peat  Marwick LLP,  having most  recently
served as a Manager.

FRANCES ANN ZIEMNIAK,  Vice  President--Finance  & Chief Financial Officer.  Ms.
Ziemniak  joined the Company in March 1995 after  three years as an  independent
consultant  focusing on  risk-management  and retail acquisition  analysis.  Ms.
Ziemniak was previously Vice President,  Finance and Chief Financial Officer for
Federated  Merchandising,  a division of Federated  Department Stores, Inc. from
1987 to 1992 and Corporate Vice President,  Financial Services for The GAP, Inc.
from 1982 to 1987.  Before Ms.  Ziemniak  joined The GAP, Inc. in 1979,  she was
employed by Arthur Young & Company.

KEITH E. ALESSI,  Director.  Mr. Alessi has been a Director of the Company since
October 1993. Mr. Alessi is Chairman,  Chief Executive Officer and a Director of
Jackson Hewitt Inc. Mr. Alessi was  Vice-Chairman and Chief Financial Officer of
Farm Fresh,  Inc. from June 1994 through June 1996. He had previously  served in
various executive capacities,  including President, with Farm Fresh from 1988 to
1992.  Mr.  Alessi also is a Director  of Farm Fresh,  Inc.  and  Shoppers  Food
Warehouse, Inc.

BRUCE C. BRUCKMANN,  Director.  Mr. Bruckmann has been a Director of the Company
since March 1993.  Mr.  Bruckmann is currently  Managing  Director of Bruckmann,
Rosser,  Sherrill & Co.,  Inc. Mr.  Bruckmann  was a Vice  President of Citicorp
Venture Capital Ltd.,  which is an affiliate of the Company,  through 1993 and a
Managing  Director  from 1993  through  1994.  He is also a  Director  of Mohawk
Industries,  Inc., AmeriSource Health Corporation,  Chromcraft-Revington,  Inc.,
Jitney-Jungle Stores of America, Inc. and Anvil Knitwear, Inc.


                                     - 10 -

<PAGE>



MICHAEL A.  DELANEY,  Director.  Mr.  Delaney has been a Director of the Company
since May 1995.  Mr.  Delaney  has been a Vice  President  of  Citicorp  Venture
Capital  Ltd.,  which is an  affiliate  of the  Company,  since 1989.  From 1986
through 1989 he was Vice  President of Citicorp  Mergers and  Acquisitions.  Mr.
Delaney  is also a  Director  of  Aetna  Industries,  Inc.,  AmeriSource  Health
Corporation,  Ballentrae Corporation, CLARK Material Handling Corporation, Delco
Remy International, Inc., Enterprise Media Inc., GVC Holdings, JAC Holdings, IKS
Corporation,  Palomar Technologies, Inc., SC Processing, Inc., MSX International
and Triumph Holdings, Inc.

GREGORY B. MAFFEI, Director. Mr. Maffei has been a Director of the Company since
November 1995. Mr. Maffei is Vice President, Corporate Development and Treasurer
of Microsoft  Corporation.  He joined  Microsoft in April 1993 and has served as
Treasurer  since 1994.  Before  joining  Microsoft,  he was  self-employed  from
September  1992 to March 1993,  serving as a  consultant  for various  companies
including  Microsoft.  From January 1991 to August 1992,  he served as Executive
Vice  President and Chief  Financial  Officer of Pay 'N Pak Stores,  Inc.  Prior
thereto, Mr. Maffei was a Vice President of Citicorp Venture Capital Ltd., which
is an  affiliate  of the  Company.  Mr.  Maffei  is also a  Director  of  Mobile
Telecommunications Technologies Corporation and Citrix Systems, Inc.

JAMES A. URRY, Director. Mr. Urry has been a Director of the Company since March
1993.  Mr.  Urry has been with  Citibank,  N.A.  since  1981  serving  as a Vice
President  since 1986. He has been a Vice President of Citicorp  Venture Capital
Ltd., which is an affiliate of the Company, since 1989. He is also a Director of
AmeriSource  Health  Corporation,  CLARK Material Handling  Corporation,  Hancor
Holding Corporation, IKS Corporation,  Palomar Products Inc., Recreation Vehicle
Product Company and York International Corporation.



                                     - 11 -

<PAGE>



                                     PART II

ITEM 5.  Market for Registrant's Common Equity and Related Stockholder Matters

The  information  required for this item is incorporated by reference to page 28
of the Company's 1996 Annual Report to Stockholders.

ITEM 6.  Selected Financial Data

The  information  required for this item is incorporated by reference to page 10
of the Company's 1996 Annual Report to Stockholders.

ITEM 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

The information  required for this item is incorporated by reference to pages 11
through 14 of the Company's 1996 Annual Report to Stockholders.

ITEM 8.  Financial Statements and Supplementary Data

The  consolidated  balance  sheets of CORT  Business  Services  Corporation  and
subsidiaries  as of  December  31, 1996 and 1995,  and the related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
years in the  three-year  period ended  December 31, 1996,  and the report dated
February 14, 1997 of KPMG Peat Marwick LLP, independent public accountants,  are
incorporated  by reference to pages 15 through 27 of the  Company's  1996 Annual
Report to Stockholders.

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures

No response to this Item is required.

                                     - 12 -

<PAGE>



                                    PART III

ITEM 10.  Directors and Executive Officers of the Registrant

The information required by Item 401(b) of Regulation S-K is included in Part I,
Item 4a. Directors and Executive Officers of the Registrant.

Compliance With Section 16(a) of the Securities Exchange Act of 1934

The  information  required for this part of Item 10 is incorporated by reference
to  page  22 of  the  Company's  Proxy  Statement  for  the  Annual  Meeting  of
Stockholders to be held May 14, 1997.

ITEM 11.  Executive Compensation

The information  required for this item is incorporated by reference to pages 18
through  21  of  the  Company's  Proxy  Statement  for  the  Annual  Meeting  of
Stockholders to be held May 14, 1997.

ITEM 12.  Security Ownership of Certain Beneficial Owners and Management

The  information  required for this item is incorporated by reference to page 14
of the Company's  Proxy  Statement for the Annual Meeting of  Stockholders to be
held May 14, 1997.

ITEM 13.  Certain Relationships and Related Transactions

The  information  required for this item is incorporated by reference to page 22
of the Company's  Proxy  Statement for the Annual Meeting of  Stockholders to be
held May 14, 1997.



                                     - 13 -

<PAGE>



                                     PART IV

ITEM 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) and (d)  Financial Statements and Schedules (see Index on Page F-1)

(b)          Reports on Form 8-K

             No reports on Form 8-K have been filed  during the last quarter of
             the period covered by this report.

(c)          Exhibits (see Index on Page E-1)



                                     - 14 -

<PAGE>



               CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES

                                   SIGNATURES



Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                         CORT BUSINESS SERVICES CORPORATION



                                         By:  /s/  Frances Ann Ziemniak
                                             -----------------------------------
                                              Frances Ann Ziemniak
                                              Vice President, Finance, Chief
                                              Financial Officer and Assistant
                                              Secretary (Principal financial
                                              and principal accounting officer)

Date:  March 31, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Signatures                              Title                                                 Date
----------                              -----                                                 ----
<S>                                     <C>                                                   <C>
/s/  Paul N. Arnold                     President, Chief Executive Officer (principal         March 31, 1997
--------------------------------        executive officer) and Director
Paul N. Arnold

/s/  Charles M. Egan                    Chairman and Director                                 March 31, 1997
--------------------------------
Charles M. Egan

/s/  Frances Ann Ziemniak               Vice President, Finance, Chief Financial Officer      March 31, 1997
--------------------------------        and Assistant Secretary
Frances Ann Ziemniak

/s/  Keith E. Alessi                    Director                                              March 31, 1997
--------------------------------
Keith E. Alessi

/s/  Bruce C. Bruckmann                 Director                                              March 31, 1997
--------------------------------
Bruce C. Bruckmann
</TABLE>


                                     - 15 -

<PAGE>


<TABLE>
<CAPTION>

Signatures                              Title                                                 Date
----------                              -----                                                 ----
<S>                                     <C>                                                   <C>
/s/  Michael A. Delaney                 Director                                              March 31, 1997
--------------------------------
Michael A. Delaney

/s/  Gregory B. Maffei                  Director                                              March 31, 1997
--------------------------------
Gregory B. Maffei

/s/  James A. Urry                      Director                                              March 31, 1997
--------------------------------
James A. Urry
</TABLE>



                                     - 16 -

<PAGE>



                          INDEX TO FINANCIAL STATEMENTS




                                                                        Page
                                                                        ----

Financial Statements...............................................      13

Financial Statement Schedules:

Schedule I - Condensed Financial Information of Registrant.........     S-1

Schedule II - Valuation and Qualifying Accounts....................     S-3



                                      F - 1

<PAGE>



Exhibit
 Number  Description                                                      Page
 ------  -----------                                                      ----

2.1      Stock Purchase  Agreement,  dated June 22, 1993, by and among
         the Company, Interfinancial,  Inc., General Furniture Leasing
         Company  and  Fortis,  Inc.;  incorporated  by  reference  to
         Exhibit 2.1 to CFR's Registration  Statement on Form S-1, No.
         33-65094, filed on June 25, 1993

2.2      First  Amendment  to Stock  Purchase  Agreement,  dated as of
         August 31,  1993,  by and among the  Company,  Fortis,  Inc.,
         Interfinancial,  Inc. and General  Furniture Leasing Company;
         incorporated  by reference to Exhibit 2.2 to CFR's  Quarterly
         Report on Form 10-Q for the fiscal  quarter  ended  September
         30, 1993

2.3      Assignment and Assumption  Agreement,  dated as of August 31,
         1993, between CFR and the Company;  incorporated by reference
         to Exhibit 2.3 to CFR's Quarterly Report on Form 10-Q for the
         fiscal quarter ended September 30, 1993

2.4      Acquisition Agreement, dated March 15, 1996, by and among the
         Company, CE Merger Sub Inc. and Evans Rents;  incorporated by
         reference to Exhibit 2.4 to the  Company's  Annual  Report on
         Form 10-K for the year ended December 31, 1995

3.1      Restated   Certificate  of   Incorporation  of  the  Company;
         incorporated  by reference to Exhibit 3.1 to Amendment  No. 3
         to the  Company's  Registration  Statement  on Form S-1,  No.
         33-97568 filed on November 13, 1995

3.2      By-laws of the Company;  incorporated by reference to Exhibit
         3.2  to  Amendment  No.  3  to  the  Company's   Registration
         Statement  on Form S-1,  No.  33-97568  filed on November 13,
         1995

4.1      Form of Indenture between CFR and United States Trust Company
         of New York,  as  Trustee,  with  respect to CFR's 12% Senior
         Notes due 2000;  incorporated  by reference to Exhibit 4.1 to
         Amendment  No. 3 to the Company's  Registration  Statement on
         Form S-1, No. 33-65094, filed on August 20, 1993

4.2      First  Supplemental  Indenture  between CFR and United States
         Trust Company of New York, as Trustee, dated August 25, 1995;
         incorporated  by  reference  to Exhibit 4.2 to the  Company's
         Registration  Statement  on Form S-1, No.  33-97568  filed on
         September 29, 1995

4.3      Second  Supplemental  Indenture between CFR and United States
         Trust  Company of New York, as Trustee,  dated  September 29,
         1995;  incorporated  by reference to Exhibit 4.9 to Amendment
         No. 1 to the  Company's  Registration  Statement on Form S-1,
         No. 33-97568 filed on October 23, 1995

4.4      Warrant  Agreement,  dated  September  1, 1993,  between  the
         Company  and United  States  Trust  Company  of New York,  as
         Warrant  Agent;  incorporated  by reference to Exhibit 4.7 to
         the  Company's   Registration  Statement  on  Form  S-1,  No.
         33-97568 filed on September 29, 1995

4.5      Amendment No. 1 to Warrant Agreement, dated February 1, 1994,
         between the Company and United  States  Trust  Company of New
         York, as Warrant Agent;  incorporated by reference to Exhibit
         4.8 to the Company's  Registration Statement on Form S-1, No.
         33-97568 filed on September 29, 1995

                                 E - 1

<PAGE>



10.1     Credit  Agreement  dated as of November 21, 1995 by and among
         CFR,  the  Company,   the  lenders  identified  therein,  and
         NationsBank, N.A., as agent; incorporated by reference to the
         Company's  Annual  Report  on Form  10-K for the  year  ended
         December 31, 1995

10.2     First Amendment to Credit  Agreement dated as of May 24, 1996
         by  and  among  CFR,  the  Company,  the  lenders  identified
         therein,  and  NationsBank,  N.A., as agent,  incorporated by
         reference to Exhibit 10.18 to the Company's  Quarterly Report
         on Form 10-Q for the fiscal quarter ended June 30, 1996

10.3     Stock Option, Securities Purchase and Stockholders Agreement,
         dated as of January 18, 1994, by and among the Company,  CFR,
         Citicorp  Venture  Capital Ltd. and certain  investors  named
         therein;  incorporated  by  reference  to Exhibit  4.6 to the
         Company's  Registration  Statement on Form S-8, No. 33-72724,
         filed on December 9, 1993

10.4     Amendment 1 to New Cort Holdings Corporation and Subsidiaries
         Employee  Stock Option and Stock  Purchase Plan as adopted by
         the Board of  Directors  of the Company on December 21, 1993;
         incorporated  by reference  to Exhibit  10.11 to CFR's Annual
         Report on Form 10-K for the fiscal  year ended  December  31,
         1993

10.5     New Cort Holdings Corporation and Subsidiaries Employee Stock
         Option and Stock  Purchase Plan (1995 Plan  Distribution)  as
         adopted by the Board of  Directors of the Company on December
         16, 1994; incorporated by reference to Exhibit 10.13 to CFR's
         Quarterly  Report on Form 10-Q for the fiscal  quarter  ended
         June 30, 1995

10.6     Form of First Amendment to Stockholders  Agreement,  dated as
         of November  13,  1995,  by and among the  Company,  Citicorp
         Venture  Capital Ltd., and certain  investors  named therein;
         incorporated  by reference to Exhibit 10.5 to Amendment No. 3
         to the  Company's  Registration  Statement  on Form S-1,  No.
         33-97568 filed on November 13, 1995

10.7     Registration  Rights Agreement for Common Stock,  dated as of
         January 18, 1994, by and among the Company,  Citicorp Venture
         Capital   Ltd.   and   certain   investors   named   therein;
         incorporated  by reference  to Exhibit 10.4 to the  Company's
         Quarterly  Report on Form 10-Q for the fiscal  quarter  ended
         March 31, 1994

10.8     CFR's Supplemental  Executive  Retirement Plan, dated October
         28,  1992,  as revised  effective  January 1, 1993,  restated
         through the Second Amendment

10.9     Agreement for Irrevocable  Trust Under CORT Furniture  Rental
         Supplemental  Executive  Retirement Plan, dated June 1, 1996,
         between CFR and Mentor Trust Company

10.10    Letter Agreement,  dated July 24, 1992,  between CFR and Paul
         N. Arnold;  incorporated  by  reference  to Exhibit  10.16 to
         CFR's Registration Statement on Form S-1, No. 33-65094, filed
         on June 25, 1993

10.11    Letter Agreement, dated August 18, 1993, between CFR and Paul
         N. Arnold;  incorporated  by  reference  to Exhibit  10.26 to
         Amendment No. 5 to the

                                 E - 2

<PAGE>



         Company's  Registration  Statement on Form S-1, No. 33-65094,
         filed on August 25, 1993

10.12    Employment  Agreement,  dated September 1, 1994,  between CFR
         and Charles M. Egan;  incorporated  by  reference  to Exhibit
         10.10 to CFR's Annual  Report on Form 10-K for the year ended
         December 31, 1994

10.13    New Cort  Holdings  Corporation  1995  Stock-Based  Incentive
         Compensation  Plan,  as adopted by the Board of  Directors on
         July 25, 1995;  incorporated by reference to Exhibit 10.16 to
         Amendment  No. 1 to the Company's  Registration  Statement on
         Form S-1, No. 33-97568 filed on October 23, 1995

10.14    Equity Share  Agreement,  between CFR and Lloyd and Eileen S.
         Lenson,  dated April 20, 1994;  incorporated  by reference to
         Exhibit 10.17 to the Company's Registration Statement on Form
         S-1, No. 33-97568 filed on September 29, 1995

10.15    Form of  Senior  Notes  Purchase  Agreement  between  CFR and
         certain  holders  of CFR's 12% Senior  Notes Due 2000,  dated
         September  28,  1995;  incorporated  by  reference to Exhibit
         10.18  to  Amendment  No.  2 to  the  Company's  Registration
         Statement on Form S-1, No. 33-97568 filed on November 1, 1995

10.16    Private Exchange  Commitment Letter by and among the Company,
         Citicorp  Venture Capital Ltd. and certain  investors,  dated
         September  28,  1995;  incorporated  by  reference to Exhibit
         10.19  to  Amendment  No.  1 to  the  Company's  Registration
         Statement on Form S-1, No. 33-97568 filed on October 23, 1995

10.17    CORT  Business  Services  Corporation  1995  Directors  Stock
         Option Plan,  as adopted by the Board of Directors on October
         18,  1995;  incorporated  by  reference  to Exhibit  10.20 to
         Amendment  No. 3 to the Company's  Registration  Statement on
         Form S-1, No. 33-97568 filed on November 13, 1995

11.1     Statement re computation of per share earnings

13.1     Portions  of the Annual  Report of the Company for the fiscal
         year ended December 31, 1996 which are expressly incorporated
         by reference herein

21.1     List of Subsidiaries

23.1     Consent of KPMG Peat Marwick LLP

27       Financial Data Schedules


                                 E - 3

<PAGE>



               CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                 (in thousands)


Condensed Balance Sheets:

                                                            As of December 31,
                                                         -----------------------
                                                           1995           1996
                                                           ----           ----
Investment in CORT Furniture Rental .............        $75,421        $125,152
Other assets ....................................           --              --
                                                         -------        --------
    Total assets ................................         75,421         125,152
                                                         =======        ========
Accrued expenses ................................           --              --
Long-term debt ..................................           --              --
                                                         -------        --------
    Total liabilities ...........................           --              --
Stockholders' equity ............................         75,421         125,152
                                                         -------        --------
    Total liabilities and equity ................        $75,421        $125,152
                                                         =======        ========

Condensed Statements of Operations:
                                                    Year Ended December 31,
                                                 -------------------------------
                                                  1994        1995        1996
                                                  ----        ----        ----
Equity in earnings of CORT Furniture
   Rental .................................      $5,130      $3,705      $15,936
Interest expense ..........................       2,637       2,716         --
                                                 ------      ------      -------
    Income before income taxes ............       2,493         989       15,936
Income tax benefit ........................       1,053       1,086         --
                                                 ------      ------      -------
    Net income ............................      $3,546      $2,075      $15,936
                                                 ======      ======      =======


                                      S - 1

<PAGE>

               CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                   (CONTINUED)
                                 (in thousands)

Condensed Statements of Cash Flows:

<TABLE>
<CAPTION>

                                                                                       Year Ended December 31,
                                                                                    -----------------------------
                                                                                     1994       1995        1996
                                                                                     ----       ----        ----
<S>                                                                                <C>           <C>      <C>
Net income .....................................................................   $ 3,546       2,075    $ 15,936
Adjustments to reconcile net income to cash flows from operating activities:
    Equity in earnings of CORT Furniture Rental ................................    (5,130)     (3,705)    (15,936)
    Discount on junior subordinated debentures .................................        68          65        --
    Interest converted to long-term debt .......................................     1,664       2,636        --
    Changes in assets and liabilities, net .....................................      (193)     (1,689)       --
                                                                                   -------    --------    --------
         Cash used in operating activities .....................................       (45)        618        --
                                                                                   -------    --------    --------
Cash flows from investing activities:
    Investment in CORT Furniture Rental ........................................      --       (36,458)    (33,224)
                                                                                   -------    --------    --------
         Cash used in investing activities .....................................      --       (36,458)    (33,224)
                                                                                   -------    --------    --------
Cash flows from financing activities:
    Issuance of common stock ...................................................        76      37,045      33,224
    Net repayments of long-term debt ...........................................       (31)       --          --
    Net proceeds from issuance of long-term debt ...............................      --            31        --
                                                                                   -------    --------    --------
         Cash provided by financing activities .................................        45      37,076      33,224
                                                                                   -------    --------    --------
Net increase in cash and cash equivalents ......................................      --          --          --
Cash and cash equivalents at beginning of period ...............................      --          --          --
                                                                                   -------    --------    --------
Cash and cash equivalents at end of period .....................................   $  --      $   --      $   --
                                                                                   =======    ========    ========
Supplemental disclosures of cash flow information:
Noncash financing activities:
    Tax benefit from exchange of debt for equity ...............................   $  --      $    741    $   --
    Exchange of debt for equity ................................................      --        20,147        --
    Tax benefit from exercise of stock options .................................      --          --           571
</TABLE>


Note to Condensed Financial Statements of Registrant:

Basis of Presentation

The accompanying  condensed financial  statements represent the accounts of CORT
Business Services Corporation on a stand-alone basis. Substantially all footnote
disclosures are omitted. Reference is made to the audited consolidated financial
statements and footnotes of CORT Business Services  Corporation and subsidiaries
as of December  31, 1996 and 1995,  and for each of the years in the  three-year
period ended December 31, 1996, which appear in the Company's 1996 Annual Report
to stockholders.

                                      S - 2

<PAGE>



               CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)



                                                          Deductions
                                       Additions         ------------
                                 --------------------    Write off of
Allowance for       Beginning    Charged to              Uncollectible   Ending
Doubtful Accounts    Balance      Expense    Other(1)      Accounts      Balance
-----------------    -------     ----------  --------    -------------   -------
December 31, 1994      802           675         --          (560)           917
December 31, 1995      917           582         --          (561)           938
December 31, 1996      938         1,234        334          (600)         1,906

----------
(1)      Other  additions  represent  the balance of Evans Rents'  allowance for
         doubtful  accounts,  which was recorded  April 24, 1996 in  conjunction
         with the acquisition.


                                      S - 3

<PAGE>


                                                                    EXHIBIT 11.1


               CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES

                    COMPUTATIONS OF EARNINGS PER COMMON SHARE

<TABLE>
<CAPTION>

                                                                                     YEAR ENDED DECEMBER 31,
                                                                        ----------------------------------------------
                                                                           1994              1995               1996
                                                                           ----              ----               ----
<S>                                                                     <C>               <C>               <C>
Weighted average common shares outstanding:
Average shares outstanding during the period .........................  4,149,105         4,581,003         11,416,193
Unexercised stock options and warrants using
    the treasury stock method, other than cheap stock ................    591,025           869,005          1,031,901
Cheap stock options and issuances(1) .................................    218,434           218,434                 --
Common shares issued in the exchange for common stock(2) .............  2,090,591         2,090,591                 --
                                                                        ---------         ---------         ----------
    Total weighted average common shares .............................  7,049,155         7,759,033         12,448,094
                                                                        =========         =========         ==========

Net income applicable to common shares:
Income before extraordinary loss ..................................... $3,546,000        $6,218,000        $15,936,000
Increase in earnings, net of taxes, resulting from the
    exchange for common stock(2) .....................................  2,149,000         2,200,000                 --
                                                                        ---------         ---------         ----------
Income applicable to common shares before extraordinary loss .........  5,695,000         8,418,000         15,936,000
Extraordinary loss, net of taxes .....................................         --         4,143,000                 --
                                                                        ---------         ---------         ----------
Net income applicable to common shares ............................... $5,695,000        $4,275,000        $15,936,000
                                                                        =========         =========         ==========

Earnings per common share before extraordinary loss .................. $     0.81        $     1.08         $     1.28
Extraordinary loss per common share ..................................         --              0.53                 --
                                                                        ---------         ---------          ---------
Earnings per common share ............................................ $     0.81        $     0.55         $     1.28
                                                                        =========         =========          =========
<FN>
-------------

(1) Pursuant to Staff  Accounting Bulletin Topic 4:D, stock options granted and
    stock  issued  within  one year of the  initial  public  offering  have been
    included in the  calculation of weighted  average common shares  outstanding
    using the treasury stock method based on an assumed  initial public offering
    price of $12.00  and have been   treated  as  outstanding  for all  reported
    periods.

(2) In connection with the  Company's  initial public  offering of common stock,
    the Company exchanged CFR'S 14% Senior  Subordinated  Pay-in-Kind Notes, the
    Company's   14.5%   Subordinated   Debentures,   the  Company's  15%  Junior
    Subordinated  Debentures,  including the unamortized  discount,  and accrued
    interest on all such  debentures for 2,728,167  shares of common stock.  For
    purposes of the computations of earnings per common share for 1994 and 1995,
    the Company has assumed that the exchange occurred as of January 1, 1994 for
    2,090,591 Shares of common stock.
</FN>
</TABLE>



<PAGE>



                                                                    EXHIBIT 21.1



                              LIST OF SUBSIDIARIES



CORT Furniture Rental Corporation
Evans Rents
Evans Convention Services
Evans Relocation Services
Levitt Investment Company
The McGregor Corporation
McGregor Enterprises, Inc.
KLM, L.L.C.



<PAGE>



                                                                    EXHIBIT 23.1





                              ACCOUNTANTS' CONSENT


The Board of Directors and Stockholders
CORT Business Services Corporation and Subsidiaries:

The audits  referred  to in our report  dated  February  14, 1997  included  the
related financial  statement schedules as of December 31, 1996 and 1995, and for
each of the years in the  three-year  period ended  December 31, 1996,  included
herein.  These  financial  statement  schedules  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial  statement  schedules  based  on  our  audits.  In our  opinion,  such
financial  statement  schedules,  when  considered  in  relation  to  the  basic
consolidated  financial  statements  taken as a  whole,  present  fairly  in all
material respects the information set forth therein.

We consent to incorporation by reference in the registration  statements on Form
S-3 (No.  33-99008) and on Forms S-8 (Nos.  33-72724,  333-15611,  333-15613) or
CORT  Business  Services  Corporation  of our reports  dated  February 14, 1997,
relating  to  the  consolidated   balance  sheets  of  CORT  Business   Services
Corporation  and  subsidiaries  as of December  31,  1996 and 1995,  and related
consolidated  statements of operations  stockholders'  equity and cash flows for
each of the years in the three-year  period ended  December  31,  1996,  and all
related  schedules,  which reports appear, or are incorporated by reference,  in
the  December  31, 1996  annual  report on form 10-K of CORT  Business  Services
Corporation.




                                            KPMG PEAT MARWICK LLP

WASHINGTON, DC
MARCH 28, 1997