Why do you add Minority Interest to Enterprise Value?

Answer hidden.


When a company owns more than 50% of another company, it must report 100% of the financial performance (revenue, EBITDA, etc.) of the majority-owned subsidiary company as part of its own financial performance.

In order to make sure the comparison is apples-to-apples, you have to add Minority Interest to get to Enterprise Value to make sure that both the numerator and denominator both include the impact of 100% of the subsidiary company.