Working with HOMS Food Products Sdn Bhd and part time lecturer with UiTM Shah Alam in various subjects; Operations Management, Production Management, Banking Operations, Business, Islamic Banking, Islamic Finance, ....... PRACTITIONER THAT TEACH

Monday, February 28, 2011

FIN426 - PATAMI / PATMI

What is PATMI?

A beginner investor asked: What is PATMI?
 

PATMI is short for profit after tax and minority interests.  Let's break this into two parts: (1) profit "after tax" and (2) profit "after minority interests".
 
Let's imagine there is a company called Company A and it has some subsidiaries. Company A and its subsidiaries are known together as a "group". When Company A reports "group" financial results for a period, it will consolidate the results of the subsidiaries as well.
 
The group "profit after tax" will be the "net profit" of the group. It is also known as the group's "attributable profit". If Company A does not own 100% of its subsidiaries, it means that third parties have "minority interests" in these subsidiaries and hence an interest in the group's attributablle profit. 

For accounting purpose, the group's "attributable profit'' comprises profit attributable to Company A's shareholders as well as profit attributable to the minority interests. To illustrate, let's say Company A reports a group attributable profit of $100 million and third parties have minority interests of  $10 million in the attributable profit. The profit attributable to shareholders of Company A is therefore $90 million, that is the difference betwen $100 million and $10 million. This $90 million is therefore known as profit after tax and minority interests or PATMI - meaning it is the net profit attributable to Company A's shareholders after apportioning for minority interests.

www.thestockmarketdigest.com/2010/08/what-is-patmi.html

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