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Simple English definitions for legal terms
consolidated financial statement
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A quick definition of consolidated financial statement:
A consolidated financial statement is a report that shows the financial condition of a company and all its subsidiaries as if they were one big company. It includes information about assets, liabilities, income, and expenses. This report is important because it gives a complete picture of the financial health of the entire group of companies.
A more thorough explanation:
A consolidated financial statement is a report that combines the financial information of a company and all its subsidiaries as if they were a single entity. This report provides a comprehensive overview of the financial health of the entire group.
For example, if a company owns several smaller companies, it can create a consolidated financial statement that includes the financial information of all those companies. This statement will show the combined revenue, expenses, assets, and liabilities of the entire group.
A consolidated financial statement is important because it gives investors and stakeholders a clear picture of the financial performance of the entire group. It can also help the company make better financial decisions by identifying areas of strength and weakness across the group.