Question

What do you see as the opportunities and challenges of segment performance reporting? Do you have any business experiences that were positive or negative relating to segment performance reporting? Do you have any thoughts or advice about any of the key issues that relate to many performance reporting activities (ex. transfer prices, report timing issues, etc.)?

Answer 1

Oppurtunities :

1)Transparency is a good thing in today’s world. Investors will better understand the firm.

3) Managers will better understand the firm.

4) Disclosure enhances the communication process both within the firm and with outsiders.

5) Transparency promotes an environment of competitiveness among division/segment of the firm, which is a good thing.

Limitations

1) Less strategic information for rival firms to utilize.

2) Can hide performance failures.

3) Can reduce rivalry among

I have a positive experience regarding the segment reporting. one of my client's business having losses were being analysed. Before studying the segment wise data, he tried to reduce wastage/abnormal cost in his organization to avoid such losses, he did that to the organisation as a whole which adversely affected the profit making segments too becuase he didn't do analysis segment wise earlier. Then after he implemented segment wise analysis, he found that the abnormal wastage/costs are relating to only few segments. and later, he avoided such things in those segments only and remaining profitable segments remained same yielding good profits.

Performance reporting activity :

Businesses large and small analyze reports to better understand trends, review past performance and to predict future performance. Reports may be analyzed by management team members or specialized analysts who are highly skilled in business intelligence interpretation. Performance reports many include quantitative data such as sales results or marketing campaign outcomes, or qualitative data such as customer survey comments. Effective performance analysis requires a step-by-step process that starts with goal setting and ends with a summary of findings and an action plan

advice regarding performance reporting :

Determine the purpose or goals of your analysis. If you recently hired a new reporting analyst and have been asked to check her work, the purpose of your analysis may be to uncover errors or problems. If company sales are trending downward, the purpose of your analysis may be to find the root causes of the poor performance.

Determine the time frame for your analysis. You may want to compare performance this year to performance last year or from a specific date to the current date. Ensure that your performance time frame is long enough to identify trends and meet your analysis goals

Gather data and reports that align with your goals and time frame. If you are using Microsoft Excel, consider hiding or excluding data elements that do not apply. The sorting, filtering and pivot table functions may also be very helpful.

Review the data and reports, and look for information related to your analysis goals. Attempt to find patterns, elements that stand out, significant changes, numbers that look too high or too low. It may be helpful to use a manual or online highlighter, and/or note taking, so you can remember and refer back to anything that catches your eye.

Interpret the information. Identify and document the trends you uncovered when you reviewed the data and reports. Draw out the findings that are most important and directly align with your analysis goals.

Summarize your findings in a memo, report or email. Start with an executive summary that describes your analysis and highlights the key findings. Include the appropriate level of detail and your recommendations for next steps.