Consolidated financial statement

Imagine you are a kid who has saved up money from doing chores and selling lemonade. Your friend also saved money from doing chores and selling cookies. If you both want to buy a toy together, you need to know how much money you have in total.

Likewise, companies have different parts that make money, like selling products or services. Sometimes, these parts are owned by the same company or by other companies that the main company owns.

A consolidated financial statement is like putting together all the money you and your friend saved up, and telling your parents how much you both have to buy the toy. In the same way, a consolidated financial statement puts together all the money made by different parts of a company, so the owners and investors can see how much money the entire company has made.

It's important for owners and investors to see the consolidated financial statement, so they know how all the different parts of the company are doing and how much money it has altogether.