2. You are an analyst reviewing the impact of currency translation methods (current/ non-current method, monetary / non-monetary method and temporal method) on a company's operations with a Yen home currency. The following information has been gathered from company and market sources. Excerpts of company financial information: FIX rate close of trading day) as of Feb 1, 2010 as of Mar 30, 2015 as of Nov 26, 2018 as of Dec 31, 2018 Euro /$ 1.3685 1.0829 1.1403 1.1431 Jan 1 - Dec 31, 2018 average 1.1717 Euro Inventory value (@Dec 31, 2018) Total Revenue (Jan 1 - Dec 31, 2018) 700 5,500 . 2010) Net income (Jan 1 - Dec 31) 1,250 Euros Current year Prior year Balance sheet 2500 1.901 1,065 1400 750 570 Cash Accounts Receivable Inventory (@Nov 26, 2018) Prepaid expenses (@Nov 26, 2018) Fixed Assets (acq Feb 1, 2010) Total assets 400 304 3,422 4500 9550 7,262 1250 951 Liabilities Accounts Payable Long-Term Debt (issued Mar 30, 2015 Total Liabilities 3000 2,281 3,232 4250 3000 2300 Capital stock (@Feb 1, 2010) Retained earnings Total equity Total liabiities and equity 2,281 1,749 4,030 7,262 5300 9550 a. Calculate the company's financial information under each of the three currency translation methods. (20 marks) b. Based on inventory turnover, return on equity and return on assets, which currency translation method presents the best company results. Justify your answer with calculations. (10 marks) 2. You are an analyst reviewing the impact of currency translation methods (current/ non-current method, monetary / non-monetary method and temporal method) on a company's operations with a Yen home currency. The following information has been gathered from company and market sources. Excerpts of company financial information: FIX rate close of trading day) as of Feb 1, 2010 as of Mar 30, 2015 as of Nov 26, 2018 as of Dec 31, 2018 Euro /$ 1.3685 1.0829 1.1403 1.1431 Jan 1 - Dec 31, 2018 average 1.1717 Euro Inventory value (@Dec 31, 2018) Total Revenue (Jan 1 - Dec 31, 2018) 700 5,500 . 2010) Net income (Jan 1 - Dec 31) 1,250 Euros Current year Prior year Balance sheet 2500 1.901 1,065 1400 750 570 Cash Accounts Receivable Inventory (@Nov 26, 2018) Prepaid expenses (@Nov 26, 2018) Fixed Assets (acq Feb 1, 2010) Total assets 400 304 3,422 4500 9550 7,262 1250 951 Liabilities Accounts Payable Long-Term Debt (issued Mar 30, 2015 Total Liabilities 3000 2,281 3,232 4250 3000 2300 Capital stock (@Feb 1, 2010) Retained earnings Total equity Total liabiities and equity 2,281 1,749 4,030 7,262 5300 9550 a. Calculate the company's financial information under each of the three currency translation methods. (20 marks) b. Based on inventory turnover, return on equity and return on assets, which currency translation method presents the best company results. Justify your answer with calculations. (10 marks)
