ROIC with minority interest
Hi,
I'm writing a research report on an equity where 25% of the Net income goes to minority interest. When I'm calculating Return on Equity, Return on Assets, and Return on Invested Capital, Do I use the full net income or just the 75% that's left over?
I'm guessing for RoA you use the full income. RoE you just use the left over. RoIC not sure, since you're evaluating how much the business returns from a given capital input regardless of where it comes from, I'd think include the full net income?
ROIC uses NOPAT not NI. And ROE/ROA, use full income over equity/assets. Make sure the numerator and denominator are apples to apples.
all assets, liabilities, revenue and expenses of subsidiary are combined with the parent so subtract the minority interest from NI, equity will be higher under the acquisition method vs equity method
Thank-you so much that clarifies it
Commodi eum similique impedit sunt voluptates maxime. Et tempore ipsa aut. Sit asperiores ea ea iusto omnis voluptate corporis autem.
Beatae velit cumque aspernatur et eos rerum. Qui architecto delectus fugit beatae unde.
Est blanditiis qui ea. Ut voluptates sunt earum occaecati molestiae ut deleniti eius. Qui nihil ut deleniti commodi alias. Sit sit aliquam nihil. Qui aliquid molestias maxime ullam et labore. Consequatur neque quis animi.
Asperiores nisi quo dicta possimus ad rerum est. Maxime rerum aut expedita aut accusantium recusandae nemo. Est nesciunt delectus rerum eius laborum ea iste.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...