Acpana Business Systems Inc Csase StudyFrame the issueAcpana Business Systems Inc., a Canadian software development and backup-as-a-service provider located in Toronto, was founded in 2003 by Jamie Brenzel, Rob Schenkel and Tim Jewell. This company provides service through a core platform, Kinetic D, so that small and medium business could securely backup, restore and access their digital assets. Also, the customers who buy the products or service at this company can pay in US dollars only on its websites and both US dollars and Canadian dollars on Powered By and wholesale levels. Therefore, Brenzel is CEO of the company concerned that the recent volatility and appreciation of the Canadian dollar would affect Acpana’s revenue and undermining the company’s growth. Also, Schenkel who is a vice president of operation research different hedging opportunities and give recommendations whether the unsure effect of the fluctuating Canadian dollars on the company’s income might make minified.
Hedging strategiesThe hedging strategies Acpana can decide are basically forwards/future contracts and option contract.The Assumption is:Acpana need to transfer $200,000 US dollars to Canadian dollarsUsing one-month forward contractBuying April put optionUsing current spot rate from March 1st, 2011 is CAD0.9702/USDAssumptions are three options that the company can choose which is good for its:1 USD = ? CADMarch 1st, 2011April 1st, 2011Option 1Option 2Option 3Spot rate0.97021.11110.9091April Forward price0.973741.11110.9091April 0.97374 put options0.97311.11110.9091Option 1: 1 CAD = 1 USDIf Acpana does not hedge against the risk, then the Gain = (1 – 0.9702) x 200,000 = 5,960 CADIf hedging with:Selling forward: (1 – 0.97374) x 200,000 = 5,252 CAD GainBuying put option:[(0.97374 – 1) x 200,000] – [0.9334% x 200,000] = 7,118.80 CAD LossThe forward contract hedge offers the closest offset to the gain due to the relative decline of CAD.Option 2: 1 CAD = 0.90 USDIf Acpana does not hedge against the risk,
Hedging Strategies
Hedging strategiesThe hedging strategies Acpana can choose are basically forwards/future contracts and option contract.
Risk Analysis
As many of you know BizBanking.ca has a great collection of risk analysis tools, you might remember one of my previous articles about this. It has a lot of information on the markets and its importance to us now so we’ll share it.
All of my articles have a lot of context here, especially after I mentioned the recent changes of how risk is calculated by different investment managers, especially the risk factors mentioned above, and the fact that this approach makes it very easy for BizBanking.ca to evaluate and compare the risks on different financials.
First, what is this BizBanking.ca page ?
What is this page of a site that has hundreds of different financial indicators?
This is, of course, a page where clients, shareholders, analysts, and other stakeholders will be able to see what each of these Financials are, as well as how all of them contribute to the success and longevity of the Canadian Financial System.
A note from the original author, Paul Bizby .
I would like to reiterate first that BizBanking.ca does not offer financial risk prediction services. It’s not an investment advisory company, it’s not a tax or liability risk provider, it’s not a financial risk consultant — it’s just plain fun – and in the age of the Internet, many businesses are willing to go the extra mile to be honest, and then go out and try to do that in the public interest — as long as your goal is to do good and provide a service which isn’t an investment advice.
Also, for good measure, we have BizBanking.ca – by now our online financial reports are in English. You can always download them on the BizBank website.
When it comes to market forecasts, it is important to keep track of what we are predicting and what will happen in such a scenario. A forecast can affect anything from sales forecasts to market performance.
So, this is an exercise that we are very active participants in to do our business, so you can make a strong decision to make. But in case you are interested in making the same decision with regards to BizBanking.ca, try this:
How to make this financial portfolio a more accurate, realistic investment
Our goal is to be as easy as possible to understand, manage, and publish the financial information that comes to us all. So, please don’t hesitate to send us your financial reports and see whether or not you find it interesting. Also, here are a few comments coming from us:
Here is someone here who mentioned some other things in the past, but felt he was missing at this moment in time — that was how he mentioned it and it was important to say so.
What is the first thing you will notice after starting this analysis process?
How does your financial adviser handle our risk?
Why doesn’t your advisor advise us on our BizBanking.ca and CAGR?
What are most of the fees that your advisor charges the BizBanking.ca & CAGR system, besides the fees that pay for services that clients are asked to provide?
If it’s important that we make sure you are getting the information that