Consolidation (business)
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Consolidation (business)
In business Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). Simply put, it is "any activity or enterprise entered into for profit." Having a business name A trad ..., consolidation or amalgamation is the merger and acquisition In corporate finance Corporate finance is the area of finance that deals with sources of funding, the capital structure of corporations, the actions that managers take to increase the Value investing, value of the firm to the shareholders, and ... of many smaller companies A company, abbreviated as co., is a legal entity In law, a legal person is any person A person (plural people or persons) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness ... into a few much larger ones. In the context of financial accounting Financial accounting is the field of accounting Account ...
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Liquidating Dividend
A liquidating distribution (or liquidating dividend) is a type of nondividend distribution made by a corporation or a partnership to its shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a Trust law, trust or partnership) that is registered by the corporation as the ...s during its partial or complete liquidation Liquidation is the process in accounting by which a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture o .... Liquidating distributions are not paid solely out of the profits of the corporation. Instead, the entire amount of shareholders' equity In finance, equity is ownership of asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an e ...
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Conglomerate Discount
Conglomerate discount is an economic concept describing a situation when the stock market values a diversified group of businesses and assets at less than the Sum-of-the-parts analysis, sum of its parts. The explanation of this phenomenon comes from a Conglomerate (company), conglomerate's inability to manage various and different businesses as well as do pure play, focused companies. Therefore, the market penalizes a multi-division firm and attaches a lower multiple to its earnings and cash flows, thus creating the discount. However, the opposite concept, called conglomerate premium, also exists. Developed vs emerging markets In the developed economies, the average value of the discount may be 13–15% relative to single-segment competitors. Because of the discount, conglomerates have become much less common in the developed markets than they once were. Only several star performers, such as Berkshire Hathaway, have managed to escape the market’s critical assessment of overdiversif ...
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Conglomerate (company)
A conglomerate is a multi-industry company – i.e., a combination of multiple business entities In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its b ... operating in entirely different industries under one corporate group A corporate group or group of companies is a collection of parent and subsidiary corporations A corporation is an organization—usually a group of people or a company A company, abbreviated as co., is a Legal personality, legal entity ..., usually involving a parent company A parent company is a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of both, with a specific objective. ... and many subsidiaries A subsi ...
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Mergers And Acquisitions
In corporate finance Corporate finance is the area of finance that deals with sources of funding, the capital structure of corporations, the actions that managers take to increase the Value investing, value of the firm to the shareholders, and the tools and analysis ..., mergers and acquisitions (M&A) are transactions in which the ownership of companies A company, abbreviated as co., is a legal entity In law, a legal person is any person A person (plural people or persons) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness ..., other business organizations, or their operating units are transferred or consolidated with other entities. As an aspect of strategic management In the field of , strategic management involves the formulation and implementation of the major goals and initiatives taken by an 's managers on behalf of stakeholders, based on consideration of and an assessment of the interna ...
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Minority Interest
In accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to compare with other ob ..., minority interest (or non-controlling interest) is the portion of a subsidiary corporation's stock that is not owned by the parent corporation. The magnitude of the minority interest in the subsidiary company is generally less than 50% of outstanding shares Shares outstanding are all the shares of a corporation that have been authorized, issued and purchased by investors and are held by them. They are distinguished from treasury shares, which are shares held by the corporation itself, thus represent ..., or the corporation would generally cease to be a subsidiary of the parent. It is, however, possible (such as through special voting rights) for a controlling interest requiring consolidation to be achieved without e ...
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Enterprise Value
Enterprise value (EV), total enterprise value (TEV), or firm value (FV) is an economic measure reflecting the market value Market value or OMV (Open Market Valuation) is the price at which an asset would trade in a Market (economics), competitive auction setting. Market value is often used interchangeably with ''open market value'', ''fair value'' or ''fair market va ... of a business (i.e. as distinct from market price A price is the (usually not negative) quantity Quantity is a property that can exist as a multitude or magnitude, which illustrate discontinuity and continuity. Quantities can be compared in terms of "more", "less", or "equal", or b ...). It is a sum of claims by all claimants: creditors (secured and unsecured) and shareholders (preferred and common). Enterprise value is one of the fundamental metrics used in business valuation Business valuation is a process and a set of procedures used to estimate the economic value In economics Econ ...
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Business Valuation
Business valuation is a process and a set of procedures used to estimate the economic value In economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the beh ... of an owner's interest in a business. Valuation is used by financial market participants to determine the price they are willing to pay or receive to effect a sale of a business. In addition to estimating the selling price of a business, the same valuation tools are often used by business appraisers to resolve disputes related to estate and gift taxation, divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes such as in shareholders deadlock, divorce litigation and estate contes ...
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Associate Company
An associate company (or associate) in accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to compare with other ob ... and business valuation Business valuation is a process and a set of procedures used to estimate the economic value In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), product ... is a company in which another company owns a significant portion of voting shares In financial markets A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known ..., usually 20–50%. In this case, an owner does not consolidate the associate's fi ...
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Arrangements Between Railroads
Railway companies This is an incomplete list of the world's Rail transport, railway operating companies listed alphabetically by continent and country. This list includes companies operating both now and in the past. In some countries, the railway operating bodies ... can interact with and control others in many ways. These relationships can be complicated by bankrupt Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. ...cies. Operating Often, when a railroad Rail transport (also known as train transport) is a means of transferring passengers and goods on wheeled vehicles running on rails, which are located on tracks. In contrast to road transport, where the vehicles run on a prepared flat surface ... first opens, it is only a short spur of a main line. The owner of the spur ...
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Consolidated Financial Statement
Consolidated financial statements are the "financial statements Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ... of a group in which the assets In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as ..., liabilities Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liability, the area of law in which manufacturers, distributors, suppliers, reta ..., equity, income In microeconomics Microeconomics is a branch of mainstream economics Mainstream economics is the bod ...
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Subsidiary
A subsidiary, subsidiary company or daughter company is a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common pu ... owned or controlled by another company, which is called the parent company A parent company is a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of both, with a specific objective. ... or holding company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies .... Two subsidiaries that belong to the same parent company are called sister ...
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