Financial statements provide a lot of valuable information to investors, including a company’s net income and cash flow. Both of these measures are used to price stocks. When a company is owned by the parent company and partner, the applicable indicator is the net income allocated to shareholders. This is minus the income that the other party requires.
The business results report is one of four financial statements required by generally accepted accounting principles, along with balance sheets, cash flow statements, and shareholder equity statements. The income statement calculates a company’s accounting income over a specific period of time. However, a company’s accounting income is not income in money and can be a completely different figure than cash. Look at the cash flow statement to see if the cash flow matches accounting income.
Net income attributable to shareholders
Net income attributable to shareholders decreased by one noting compared to net income on the report of business results. A company’s net income equals all revenue minus all expenses, including interest and tax expenses. Net income attributable to shareholders is net income minus the share of non-controlled benefits, sometimes referred to as minority benefits.
The uncontrolled benefit occurs when there is a parent company and another partner or partnership member who owns a subsidiary. After the net income is calculated, the income is divided among the parent company and partnership members. After the uncontrolled interest is subtracted, the portion of the income left will go directly to the shareholders of the parent company. The uncontrollable benefit, in this case, is reported from the parent company’s point of view. The shareholders own the parent company.
How it is used
Net income allocated to shareholders is used in the same way that net income is used to price a company. Usually, a company is appreciated in terms of income. By excluding minority benefits, an analyst can better understand the income that shareholders require. If minority shareholder interests are taken into account, the net income figure will be exaggerated.