Consolidated financial statements tend to be most useful for:
A)Creditors of a consolidated subsidiary.
B)Investors and long-term creditors of the parent company.
C)Short-term creditors of the parent company.
D)Stockholders of a consolidated subsidiary.

Question

Quizplus · Accepted Answer

Consolidated financial statements provide a complete financial picture of a parent company and its subsidiaries, which is important for investors and long-term creditors who want to analyze the financial health and performance of the entire entity. Short-term creditors are more interested in the parent company's individual financial statements, while stockholders of a consolidated subsidiary may be more interested in the subsidiary's standalone financial statements. Creditors of a consolidated subsidiary may also find the consolidated financial statements useful to assess the financial condition of the subsidiary's parent company. However, among the given options, B is the most appropriate choice.

Consolidated Financial Statements Tend to Be Most Useful For