Analyze segment information
Response to the following problem:
Worldwide Electronics Corporation, based in New Jersey, sells electronics equipment through 150 retail and 25 outlet stores across the United States and in 18 different foreign countries. In addition, the company has a very well designed website through which it markets its products. The company manages and evaluates the retail, outlet, and Internet businesses through three separate divisions, each with its own management.
1. Define a "segment" of a business. What would be a logical way for Worldwide Electronics Corporation to segment its business for financial reporting purposes?
2. What is the purpose of segment reporting? In what ways might segment reporting benefit prospective investors in Worldwide Electronics?