Noncontrollable Interest Question
Okay, so why do we add noncontrollable interest in the EV formula? Wouldn't it already be included in market capitalization?
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Market capitalization is just shares outstanding * share price. NCI has no direct impact there.
Simple explanation is that the non controlled portion of a subsidiary's revenues and expenses are included on the parent company's income statement, so to normalize ratios like EV/EBITDA, we need to add NCI to the numerator for comparison purposes.
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