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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Group vs Company Performance

Group vs Company Performance

3 posters

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1Group vs Company Performance Empty Group vs Company Performance Sat Feb 04, 2012 5:34 pm

anubis


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Hi All,

This question is quite related to one of my earlier posts: http://forum.srilankaequity.com/t2024-help-group-financials-vs-company-financials

So, if the company is making losses while the group is on profit, does that mean they are not doing their "core business" well? To me it feels like the answer is "Yes". I mean, the group is more like an investment company making profits out of investing in other companies but they suck at their own business.

Am I correct?

Cheers!

2Group vs Company Performance Empty Re: Group vs Company Performance Sat Feb 04, 2012 7:32 pm

sriranga

sriranga
Co-Admin

From wiki.answers

What is the difference between group financial statements and company financial statements?
group is multiple you see.

EDIT: Often an organisation will release both a group statement and a company statement. Group refers to the company in question and all its subsidiary holdings. This is because users of financial statements might want to know how the companies "core" operations are going as opposed to looking at the group statement which could have profits boosted by a different operation etc.

Edit2:
There is only a difference between the two statements for firms that hold shares in subsidiaries.
A subsidiary is a company that the parent company has control over, usually (but not necessarily) when the parents holds more than 50% of the shares.

In the company statements a financial interest in a subsidiary is shown as a line item ('subsidiaries') on the balance sheet. Depending on the valuation method used, dividends received or a profit share can be included in the income statement. (depending whether the cost method or equity method is used)

In the group financial statement (also called consolidated financial statement) the item subsidiaries is no longer included. Instead, the underlying assets and liabilities of the subsidiaries are shown. Similarly for the income statement, the subsidiaries expenses and revenues are included.

The group statements are usually informative, while the company statements provide little information. For example, the balance sheet of a listed company which is a holding company will have subsidiaries as its main asset (hence a single item as its assets). The consolidated balance sheet will show the actual assets (PPE, inventories, cash, etc) of the various subsidiaries. (Same principle for income statement).

Read more: http://wiki.answers.com/Q/What_is_the_difference_between_group_financial_statements_and_company_financial_statements#ixzz1lQC9Eskf

And also please read the following link may be helpful to acquire more knowledge.
http://www.enotes.com/financial-statements-reference/financial-statements#consolidated-financial-statements

http://sharemarket-srilanka.blogspot.co.uk/

3Group vs Company Performance Empty Re: Group vs Company Performance Sat Feb 04, 2012 8:49 pm

anubis


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Thanks sriranga.

Btw, do you know how it's possible to find out all the subsidiaries corresponding to a given consolidated statement? I mean I can see the "Group" financials and "Company" financials from a quarterly report, but how to find out other subsidiaries of the parent company?

To put in another way, if the "Company" is making losses while the "Group" is on profit, how can we find out where that profit came from?

Sorry about asking too many questions Smile

Cheers!

4Group vs Company Performance Empty Re: Group vs Company Performance Sat Feb 04, 2012 8:58 pm

sriranga

sriranga
Co-Admin

Usually we need to go through the financial notes to find more details.
Which provide valuable infos.
There is a saying in the financial analyst world most of the analyst start to read from the last page of the report. Because first 10 -20 pages always come with photos and other details to distract the share holders.

http://sharemarket-srilanka.blogspot.co.uk/

5Group vs Company Performance Empty Re: Group vs Company Performance Sat Feb 04, 2012 9:33 pm

anubis


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Thanks for the tip!

It seems this is pretty much like playing a detective Wink

Cheers!

6Group vs Company Performance Empty Re: Group vs Company Performance Sat Feb 04, 2012 10:15 pm

greedy

greedy
Manager - Equity Analytics
Manager - Equity Analytics

anubis wrote:Thanks sriranga.

Btw, do you know how it's possible to find out all the subsidiaries corresponding to a given consolidated statement? I mean I can see the "Group" financials and "Company" financials from a quarterly report, but how to find out other subsidiaries of the parent company?

To put in another way, if the "Company" is making losses while the "Group" is on profit, how can we find out where that profit came from?

Sorry about asking too many questions Smile

Cheers!

1)You can get full list of subsidiaries from parent company annual report...
2) If subsidiaries are listed companies, you can get the annual and quarterly accounts of subsidiaries
3) Refer segmental analysis of group in the quarterly and annual reports.
4) Remember... you can get only very limited information of unlisted subsidiaries... if you really need more info, try company registrar office.

7Group vs Company Performance Empty Re: Group vs Company Performance Sat Feb 04, 2012 11:32 pm

anubis


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

@greedy: thanks! Smile

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