Fundamental Glossary / Indian Stock Market-Specific Fundamentals
Consolidated Financial Statements
The accounts of a parent and its subsidiaries presented as one economic entity.
Formula
Inter-company sales, loans, and investments are eliminated. Minority interest, or non-controlling interest, shows the part of subsidiaries that the parent does not own.
What it means
Consolidation is the right picture of a group that operates through subsidiaries. The parent's standalone profit can be a trickle of dividends while the subsidiaries earn the money.
Ind AS requires consolidation when the parent controls another entity. Joint ventures and associates are brought in by the method the standard specifies, not always line by line.
How to read it
Value the consolidated earning power, then subtract minorities and net debt at the group level. Forgetting minorities counts other people's profit as the parent's.
What to watch
Consolidation can hide a cash trap: profit earned in a subsidiary that cannot pay a dividend up to the parent. The standalone cash and the consolidated profit should be read together.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.