C12-Chp-09-1B Foreign Currency-PP-Godfrey-2012

C12-Chp-09-1B Foreign Currency-PP-Godfrey-2012 -...

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International Issues. Howard Godfrey, Ph.D., CPA UNC Charlotte Copyright © 2010, Dr. Howard Godfrey Edited, April 20, 2010.
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Costco and its foreign currency issues.
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Costco has 555 warehouses, 407 in U. S. and Puerto Rico, 77 in Canada, 21 in the United Kingdom, 6 in Korea, 5 in Taiwan, 8 in Japan and 31 in Mexico.
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Richard Galanti, CFO of Costco, stated that “third quarter 2009 earnings results were negatively impacted by several factors, including: 1. lower international profits, a result of the significant strengthening of the U.S. dollar when compared to the currencies of Canada, the United Kingdom, Korea and Mexico; and lastly,
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(HP) Dear Fellow Stockholders, Fiscal 2008 was a strong year with some notable accomplishments. … Fiscal 2008 was also a difficult year. .. HP proved our ability to execute in a tough environment. In 2008, HP delivered: Net revenue growth of 13 percent, or 8 percent in constant currency, to $118.4 billion
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HP-Approximately 69% of sales are outside of U.S. Other currencies, particularly the euro, the British pound, Chinese Yuan Renminbi and the Japanese yen, can have an impact on HP’s results (expressed in U.S. dollars). Currency variations also contribute to variations in sales of products and services in impacted jurisdictions. In addition, currency variations can adversely affect margins on sales of our products in countries outside of the United States and margins on sales of products that include components obtained from suppliers located outside of the U.S.
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HP-We are exposed to foreign currency exchange rate risk inherent in our sales commitments, anticipated sales, anticipated purchases and assets, liabilities and debt denominated in currencies other than the U.S. dollar. We transact business in approximately 40 currencies worldwide, of which the most significant to our operations for fiscal 2008 were the euro, the Japanese yen and the British pound.
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HP-For most currencies, we are a net receiver of foreign currency & benefit from a weaker U.S. dollar. We are adversely affected by a stronger U.S. dollar. Even where we are a net receiver, a weaker U.S. dollar may adversely affect certain expense figures taken alone.
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9 Impact of Exchange Rates on Income 1.On 6-1-09, a U.S. corp. sold its product to a Hong Kong co. for $400,000HKD, 2.On 6-1-09, exchange rate was $8HKD to
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This note was uploaded on 03/09/2012 for the course ACCT 6120 taught by Professor Godfrey,h during the Spring '08 term at UNC Charlotte.

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C12-Chp-09-1B Foreign Currency-PP-Godfrey-2012 -...

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