I am confused in the calculation of the ROE. Normally it should be the NI/Total shareholder equity. However, in analyzing a company, doesn’t it make more sense to focus on the ROE of the company excluding the minority interests in both the NI and the shareholder equity, i.e.: ( NI - minority interests) / (Shareholder equity - minority equity)
It depends what you are trying to look at>
Assessing mangement :
Included minority interests. The manager’s of the consolidated entity control the subsid and thus are making the decisions on how both companies worth.
Looking at your returns as shareholder of parent entity adjust fpr minorities.