All financial documents or other files containing information about the historic financial and operational performance of individual divisions within the company.
Divisional reporting refers to the level of detail provided with regard to the financial performance of your company’s divisions. Specific issues to address include:
Getting each of your business units to report critical financial metrics separately helps you to:
All investors are looking to assess the strategic position of the business across many factors including forecast growth, profitability, capital intensity, volatility in earnings, market position and barriers to entry.
But most businesses could divide their business up across geographies and customer segments. Investors know that their assessment are likely to vary considerably across each business division.
Investors will often perform an analysis on the business by looking at each division individually. This analysis is almost impossible without key financial metrics being reported separately for each division they wish to assess. If they can perform this analysis efficiently it will deepen their understanding of the business and greatly increase the confidence they have in entering into any transaction.