Business segment

  • Portion of a larger company that
    • Account for more than 10% of the company revenues or assets
    • Be distinguishable from company’s other lines of business in term of
      • Risk
      • Return
  • Geographic segments 
  • when a business divides its market on the basis of geography
  • Prepare more detailed analysis by examining 
    • the performance of business 
    • or geographic segments separately
  • Firm’s overall performance
    • Segment profit margins
    • Asset utilization (turn over)
    • Return on assets


  • Asset utilization = revenue/total asset 
  • Return on assets = net income/total assets