I always read the Business section in its entirety (note: I read every section in its entirety to be honest). Besides the things I've already mentioned, the obvious things to focus on are revenue breakdown by whatever segmentation they choose, key business relationships, and key business risks. The main things I'm trying to answer in this section are:
1) Where is the crown jewel of this business? I want to identify the cash generator/main earnings driver for the company. Most of the time this isn't going to be the same segment as what I'm looking for in #2, but it's very important to understand what the majority cash generator is for the company. Normally a company can't survive long enough without its bread and butter to develop any high-growth areas, so determining the key risks to it are just as significant as determining the catalysts to the explosion of another segment.
2) What is the major growth generator? Having a cash cow is great, but doesn't make for a compelling investment if it's growing top line at 1% annually. Normally management will make a point to highlight any major growth in a particular segment, but then again sometimes they won't. Always have this question in your mind when you're looking through segment information. If sales as a % of revenue have moved up from something like low teens to mid-thirties over the past few years, all the sudden you may have a good idea of where growth is coming from... or where a segment will have to pick up the slack as a crown jewel business starts to wither away...
3) Where are the key risks for #1 and #2? Section 1A will always list the risks to the business. A certain chunk of business risks seem identical in every company and can probably be skimmed, but firm-specific risks can be very important and disclose some important information. The things you can usually glaze over include the standard "macroeconomic conditions" clauses,risks (unless it's a -heavy business like a medical supplier, car company, airline, etc.), and key man statements. Specific things to look for might be in regards to expansion plans re: the growth engine and market share or other revenue losses re: the crown jewel. Management will usually outline what they think is scary about both of these things, and that will help you build a foundation for what you need to go out and investigate after you're done reading the K.
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