COFFEE HOLDING CO INC Segments Disclosure
NOTE 14 – SEGMENT INFORMATION:
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.
The Company’s chief operating decision maker (“CODM”) is Andrew Gordon, President, Chief Executive Officer, Chief Financial Officer, and Director. The Company has one reportable segment: coffee. The Company derives revenue primarily in North America and manages the business activities on a consolidated basis.
The coffee segment derives revenue from the sale of wholesale green coffee, private label coffee and branded coffee. Revenue for these product lines is recognized upon shipment to the customer. The CODM assesses performance for the coffee segment and decides how to allocate resources based on operating income that also is reported on statement of operations as consolidated income (loss) from operations. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets.
When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews the Trading Profit and Operating income table below:
| Statement of operations | ||||||||
| For the years ended | ||||||||
| 10/31/2025 | 10/31/2024 | |||||||
| Net sales | 96,283,547 | 78,562,298 | ||||||
| Cost of Goods Sold (1) | 82,676,850 | 64,100,983 | ||||||
| Gross Profit | 13,606,697 | 14,461,315 | ||||||
| Trading Profit (1) | 1,807,969 | 1,580,454 | ||||||
| Overhead (2) | 13,262,306 | 13,078,211 | ||||||
| Operating income | 2,152,360 | 2,963,558 | ||||||
| (1) | Trading profit is included in cost of goods sold in the consolidated statement of operations. |
| (2) | Overhead includes officers’ salaries and selling and administrative expenses included in the consolidated statement of operations. |
The CODM uses operating income (loss) to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the coffee segment or into other parts of the entity such as for acquisitions or to pay dividends. Intra-entity sales and cash transfers are eliminated in operating income (loss) used by the CODM.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.