If a Canadian company has substantial operations in Europe, and the value of the euro falls relative to the Canadian dollar, the company's profits, stated in Canadian dollars, will also fall.

Question

Quizplus · Accepted Answer

If the value of the euro falls relative to the Canadian dollar, the company's profits earned in euros will be worth less when converted into Canadian dollars. However, if the company's operations are generating profits in euros, those profits will not necessarily "fall" in terms of euros. It is possible that the company would still earn the same amount of profits in euros, but the value of those profits when converted into Canadian dollars would be lower due to the weaker euro.

If a Canadian Company Has Substantial Operations in Europe, and the Value