For American company Leather Exporters, first quarter sales in Italy were higher compared to the preceding year but profits were down. What could account for this difference?

Question

Quizplus · Accepted Answer

The difference in profits could be due to a change in currency exchange rates, which may have affected the profitability of Leather Exporters' sales in Italy. If the currency of the country where the company is based strengthens compared to the currency of the country where they are selling their products, it can reduce their profits.

For American Company Leather Exporters, First Quarter Sales in Italy