Case Study:

You are a CFO of John Enterprises, a firm which is engaged in import and export of garments with different countries. Usually they import raw materials especially from India, Pakistan and Indonesia and process those Martials to produce finished goods and export to USA and European countries. Their import LC are always opened in CAD$ and their export invoices are generated in US$ or Euro. Their annual import is around C$20,000,000 and their exports are worth of $45,000,000 and ? 12,000,000/- to USA and European counties, respectively. Exchange rate between C$ and U$, C$ and Euro are usually stable. However, exchange rate between C$ and India, Pakistani and Indonesian rupees are quite volatile, as these currencies apparently depreciate against Canadian Dollars.

To support its production John Enterprises are importing following materials from different countries: Import commodity Values Transaction Date Settlements Date Country Cotton $50,000 7th March 2019 5th June 2019 India Yarn C$ 300,000 1st March 2019 30th March 2019 Pakistan Grade A yarn C$ 1,000,000 28th Feb 2019 30th April 2019 Indonesia Grade B yarn C$ 200,000 24th Feb 2019 23 May 2019 India Cotton C$ 550,000 18th Feb 2019 17th May 2019 Pakistan Grade A yarn E 2,000,000 15 Feb 2019 15 March 2019 UAE (only trade with UAE) Companies export schedule is the following Export Values Transaction Date Settlement Date Country Denim Jeans US 2,000,000 6th March 2019 5st May 2019 USA Kids clothing E 1,500,000 21st Feb 2019 20th May 2019 Spain Garments ( 5,500,000 1st Feb 2019 30 April 2019 Germany Garments f 1,000,000 1st Jan 2019 14 March 2019 UAE