Consolidated Financial Statement
Definition & Meaning:
The combined financial statements of a parent company and its subsidiaries.
Definition of 'Consolidated Financial Statements’:
Consolidated financial statements are the combined financial statements of a company and all of its subsidiaries, divisions, or suborganizations.
Explanation:
Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge the overall health of an entire group of companies as opposed to one company 's stand alone position.
A consolidated financial statement gives investors a clear view of a corporation 's global activities.
A consolidated financial statement typically combines a company 's operating activities with data from its subsidiaries. A consolidated financial statement helps an investor, a regulator or a corporation 's top management evaluates the true financial standing of the corporation. A consolidated financial statement also may indicate an entity 's financial position or cash flows during a period.
Meaning of 'Consolidated Financial Statements’:
Let 's assume Company XYZ is a holding company that owns four other companies: Company A, Company B, Company C, and Company D. Each of the four companies pays royalties and other fees to Company XYZ.
At the end of the year, Company XYZ 's income statement reflects a large amount of royalties and fees with very few expenses -- because they are recorded on the subsidiary income statements. An investor looking solely at Company XYZ 's holding company financial statements could easily get a misleading view of the entity 's performance.
However, if Company XYZ consolidates its financial statements -- "adding" the income statements, balance sheets, and cash flow statements of XYZ and the four subsidiaries together -- the results give a more complete picture of the whole Company XYZ enterprise.
In Figure 1 below, Company XYZ 's assets are only Rs.1 million, but the
The combined financial statements of a parent company and its subsidiaries.
Definition of 'Consolidated Financial Statements’:
Consolidated financial statements are the combined financial statements of a company and all of its subsidiaries, divisions, or suborganizations.
Explanation:
Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge the overall health of an entire group of companies as opposed to one company 's stand alone position.
A consolidated financial statement gives investors a clear view of a corporation 's global activities.
A consolidated financial statement typically combines a company 's operating activities with data from its subsidiaries. A consolidated financial statement helps an investor, a regulator or a corporation 's top management evaluates the true financial standing of the corporation. A consolidated financial statement also may indicate an entity 's financial position or cash flows during a period.
Meaning of 'Consolidated Financial Statements’:
Let 's assume Company XYZ is a holding company that owns four other companies: Company A, Company B, Company C, and Company D. Each of the four companies pays royalties and other fees to Company XYZ.
At the end of the year, Company XYZ 's income statement reflects a large amount of royalties and fees with very few expenses -- because they are recorded on the subsidiary income statements. An investor looking solely at Company XYZ 's holding company financial statements could easily get a misleading view of the entity 's performance.
However, if Company XYZ consolidates its financial statements -- "adding" the income statements, balance sheets, and cash flow statements of XYZ and the four subsidiaries together -- the results give a more complete picture of the whole Company XYZ enterprise.
In Figure 1 below, Company XYZ 's assets are only Rs.1 million, but the