Financial Statements

Financial statements, along with the accompanying footnotes, represent the heart of an annual report as well as 10-K and 10-Q. They allow readers to analyze a company’s financial performance and health. Financial statements include:

  1. Consolidated Income Statement

  2. Consolidated Balance Sheet

  3. Consolidated Statement of Cash Flows

  4. Consolidated Statements of Stockholders’ Equity

For the purposes of financial analysis, the three core financial statements are 1, 2, and 3 above.

What Does “Consolidated” Mean?

Consolidated simply means that these financial reports contain financial information of all businesses majority-owned by a parent company.

In the case of Berkshire Hathaway, which owns 40 companies (including Fruit of the Loom®, Benjamin Moore, and International Dairy Queen) and is run by Warren Buffett, the company reports its financial results as a consolidated entity, encompassing all of its majority-owned businesses.

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