FCFF and Minority Interest

Hi Guys… I am calculating the FCFF as follow: EBIT(1-T) + Dep and Amort - Capex- Change WK…

Mi doubt is… if the company consolidated result that no belong to them (minority interest from P&L) Should I deduct it from the FCFF?? because then when I calculate the Equity Value, I subtract the Minority Interest from Balance Sheet.


The firm value includes the minority interest value. We are talking about the whole firm here. So you must not deduce nothing.

Common equity, on the other hand, considers only common equity. Sounds stupid for the simple this is, but is true. Minority interest is not part of common equity.

Minority interest isn’t cash flow.

It doesn’t come into play in calculating FCFF or FCFE.