Explore the Dasani bottle water company in terms of currency denomination, discuss how the firm prices its revenues and costs. For MNE's with multiple foreign operations, consider any one of those operations and the contribution it is making to the parent firm's profits. Using this information, what do you think would be the effect of increases/decreases in the dollar's exchange value on the firm's profitability?© BrainMass Inc. brainmass.com March 4, 2021, 8:01 pm ad1c9bdddf
Dasani, part of Coca Cola Group, being a US based company, has to comply with US GAAP (Generally Accepted Accounting Principles). Therefore, even though Dasani/ Coca Cola has operations all around the world and the actual revenues and costs in those countries are earned and incurred in their respective currencies, Dasani has to finally report these revenues and costs of its subsidiaries and branches in foreign countries in US dollars to the securities and exchange commission. This ensures consistency in reporting of all its subsidiaries in multiple nations, such as Canada, Brazil or Argentina.
The contribution that such operations in multiple nations like Canada or Brazil makes to the parent firm's profit is immense. The company's operations in these nations significantly add to the top line revenue and ...
Currency denomination for foreign operations of Dasani