Minority interest refers to the ownership interest in a company that is less than 50%. This ownership interest is typically held by individuals or entities other than the majority shareholders.

Minority interest is important because it can impact a company's financial statements. Specifically, it can affect the calculation of capital profits, which are the profits that a business generates from its capital investments.

When a company has minority interest, its financial statements must reflect the portion of profits that belong to the minority shareholders. This is typically done through the use of consolidated financial statements, which combine the financial results of the parent company and its subsidiaries.

Capital profits, then, are calculated based on the proportion of ownership held by the parent company. For example, if the parent company owns 75% of a subsidiary and the subsidiary generates $1 million in profits, the parent company's share of capital profits would be $750,000. The remaining $250,000 would belong to the minority shareholders.

Overall, minority interest is an important consideration for companies that have multiple owners or subsidiaries. By properly accounting for minority interest, companies can ensure that their financial statements accurately reflect their true financial position.