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Help with accounting problem
Question: (please post answers inside body of an email as i do not have excel or word on my computer. thanks!)
Yves Richard faces a decision that will determine the future strategic direction of Caron Furniture. It is the role of the accountant to not only provide relevant information to facilitate the decision-making process, but to be a valuable member of the decision-making team. The primary issue is what role the U.S. market should play in Caron`s future. Your responsibility is to examine this issue from a purely financial perspective and to provide sound advice to Yves Richard.
Required:
List the options that should be considered.
The average overall margin on sales is 38%. How profitable is the U.S. market compared to the Canadian market? What are their relative profit margins?
Does further expansion into the U.S. make sense financially? How would expansion benefit Caron in terms of profitability? (Note: Where financial information is lacking in the case, use Steelcase, Inc. as a benchmark.)
What are the financial risks of expansion into the U.S.?
What is your financial recommendation? Provide support for your recommendation.
Your performance as a financial manager is evaluated, in part, on your ability to communicate in an organized, clear, and concise manner. You should use tables and point form where appropriate. Also, be sure that your computations are properly labelled. Lastly, be sure that your answer stays focused on financial issues.