Question

Describe segmented information, and explain the way in which companies determine segments. Identify three (3) advantages and three (3) disadvantages of segmented financial data. Give your opinion on whether or not the advantages outweigh the disadvantages. Outline the manner in which Verizon segments its financial data. Suggest key actions that Verizon’s management can take in order to improve the company’s segmented financial data.

Answer 1

A segment  is a part of a business/company that can be identified by the products it provides or by the services or geographical locations it operates in. In other words, it a single part of a business that can be distinctly separated from the company as a whole based on its customers, products, or market places.

A) segmented information:- An Information/data  about different types of products and services of an enterprise and its operations in different geographical areas. It is important to identify the risk and returns of diversified or multi locational business.

Companies determine the segments based on its customers , product or market places.

B) Advantages of segmented financial data:-

1)Transparency in information

2)Helping to identify the risk and return of investment/ capital utilization

3)Helping data Manipulation

C) Disadvantages of segmented financial data:-

1) Misunderstanding likely to be found among investors about segment information.

2)Potential detriment to the reporting company of disclosing information about individual segments.

3) Time consuming for segment data analysis.

Inshort we can say that advantage of segmented information is always outweigh the disadvantages.

D) Verizon segmented its financial data on the basis of their service - Wireline and wireless. US GAAP is followed to prepare the accounting statements always.

E) Key Actions: Verizon management can think about creating various segments in the future due to 5G technology improvements. Also they can segmented their business country wise and service waise.