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How Does a Parent Company Account for the Sale of a Portion

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How does a parent company account for the sale of a portion of an investment in a subsidiary?


Definitions:

Statement Of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down into operating, investing, and financing activities.

Times-Interest-Earned Ratio

A metric used to evaluate a company's ability to meet its interest obligations, calculated as earnings before interest and taxes (EBIT) divided by interest expense.

EBIT

Earnings Before Interest and Taxes, a metric used to assess a company's financial performance, focusing purely on operational and production efficiency.

Net Profit

The amount of profit left over after all expenses and taxes have been subtracted from total revenue.

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