Assignment:
Details: Hector, Bonita, and the entire management team have been pleased with your work on the project. Given the work you have done, the senior officers feel more informed and closer to making a decision on the international expansion.
Given that the company is looking at Canada as a possible expansion market, you have been asked to do an analysis on the Canadian currency (the Canada dollar) and make predictions about its short- and long-term prospects relative to the U.S. dollar. The senior officer team wants you to use whatever economic and financial data you can find from good sources to help with your analysis. You have been asked to complete your analysis and present it in a PowerPoint presentation format to the senior management team at the next meeting.
Use economic data and financial data from solid sources such as the Federal Reserve, Bank of Canada, or Chicago Mercantile Exchange to evaluate the short- and long-term outlook of the Canadian dollar relative to the U.S. dollar. You can use spreadsheets, tables, and/or graphs to support your work.
Scenario:
As a senior financial analyst for Fresh Juices, Inc., the largest fresh fruit drink company in the United States, you are a key player in corporate finance for the business. You are consulted on major capital projects, prepare analysis for executive officers, present material at senior management meetings, and play the overall role of advisor to executive and senior officers.
Fresh Juices, Inc. has witnessed its sales grow from US$1 million in the first year of operations in 1970 to US$1.5 billion last year. The company started as a regional supplier of fresh fruit drinks in California and initially expanded in the West. However, over the last 15 years, the company has moved further east, north, and south. Today, the company's lines of products can be found on the shelves of any major grocery store in the U.S., and its market share of fresh fruit drinks is 80% in the United States.
The Drive to Expand Internationally
On a recent trip to Canada and Latin America, Hector Vasquez, the company's chief executive officer (CEO), noted the lack of fresh fruit drinks in the supermarkets. When he returned, he brought in all of his senior officers and said, "I want to be international in a year. We have a great product, and I think we can compete effectively in North and South America, Europe, and Asia. My recent travels confirmed my suspicion that fresh fruit drinks like ours do not exist outside the U.S.," he said. "Furthermore, with the U.S. market growing at 2% annually, we need to find other markets that have the potential to grow at a faster pace."
Mr. Vasquez asked your boss, Bonita Galloway, to head up the team to do the analysis on international opportunities and report back to him in the coming weeks. With that, he dismissed the meeting, and the senior officers left.
The Meeting
The U.S. business was so mature and was not growing rapidly, so Ms. Galloway thought international expansion might be just what the company needed. She was concerned that the company's profit margins would start to be squeezed in the company years if the firm did not find other sources of revenue growth. This would force the company to make drastic cost cuts and could potentially impact Fresh Juices' ability to compete.
Given your role in the organization, Ms. Galloway immediately thought of you as the finance lead on this project. She called you to her office to discuss what happened at the meeting with Mr. Vasquez.
After briefing you, she said, "I want you to be the primary contact on this. I will need you to work closely with the various departments that will be involved with this effort. Specifically, I need to lean on your analytical capabilities because we need to make objective decisions. I need you to give me the facts-not what you think I want to hear. This is important to the future of the company. I know I can count on you."