Alright, so now that I have given you some background information on CoolBrands we can get more into the nitty-gritty details. Since CoolBrands is a Canadian based company but does a lot of business around the world (about 80 countries total like I said before), they have to deal with the difference between currencies. I didn’t realize before that this would play into how much money a company makes, but it does if you think about it. I always assumed money is money, but that’s not necessarily the case I am beginning to realize…
Inserted is a chart comparing Canadian dollars to 1 U.S. dollar (USD) for this past month. Since CoolBrands does a lot of business in the United States, it would be helpful to their company for the USD to be worth about the same as the Canadian dollar. If it is worth less, then any business done in the United States would not make them as much money as if it were done in Canada, but if the USD is worth more, then they will actually be making more money. The exchange rate between countries is something that affects a lot of companies and is closely watched.
Here is an article from the Toronto Star in 2004 talking about how due to the exchange rate between the USD and Canadian currency, CoolBrands didn’t make quite as much money as expected. In fact, if the exchange rate had remained consistent with the year prior, according to CoolBrands, the annual revenue would have been 11% higher. Even though that blows for CoolBrands, this is a problem they will consistently have to deal with and they are still successful despite this setback.
Basically the point I am trying to make in this post is that even though the exchange rate can cause problems for some companies, they are still creating a product that consumers continue to buy and therefore are putting money into the economy. So you know what CoolBrands, deal with your little exchange rate problems, because we, as your customers, still love fro-yo and are going to buy it no matter what.
Bibliography for this post:
“Canadian Dollars (CAD) to 1 US Dollar (USD).” Canadian Dollars to US Dollars. Exchangerates.org, n.d. Web. 09 Dec. 2012.
CoolBrands Feels Pressure from Exchange Rate.” Toronto Star 01 Dec. 2004, Business sec.: C03. Newspaper Source Plus. Ebsco. Web. 9 Dec. 2012.
Happy reading and eating! -Erica