http://www.bloomberg.com/apps/news?pid=20601082&sid=asza3wG0bq90&refer=canada
Summary:
The Canadian currency has dropped from near an eight months high, since unemployment has been happening, . Traders predict that the U.S Federal Reserve may increase the interest rates. Meny Grauman, an economist, announced that the loonies have been overdone. The Canadian currency might reach and equal to the U.S. Also, Bank of Canada believed the unprecedentedly rapid rise in Canadian dollar would fully offset the improvement of economic conditions. In Bloomberg survey, it showed that the unemployment rate rose higher than their prediction. U. S. has lost 504,000 jobs in eight months and it was the highest jobless rate since 1983; however, a Chief currency strategy in TD Securities Inc, Shaun Osborne believes the confidence in a rebound would rise. In the interest-rate bets, traders started to price in chances that Fed may lift interest rate in the recession eases.
Connection:
Chapter 6 was divided into 5 sections: Cash, Short-Term Investments, Accounts Receivable, Notes Receivable, and Statement Analysis Consideration. In this article, there is a connection with a small portion of the section that deals with cash. Cash has a very strong 'purchasing power', which is the ability to be exchanged for goods and services. Cash can undertake a variety of forms: currency, cheques, money orders, on hand, money deposited in banks and many more. Currency is something we cannot control and depending on how well our economy is doing, it will always change. For example, in this article, as the US dollar goes down due to the high unemployment rate, the Canadian dollar started to increase rapidly. Internal control is also mentioned in this chapter. With better internal control, we can make the control of cash much easier and the processing of transactions much more efficient.
Reflection:
With limited amount of jobs and more people unemployed, fewer people buy goods and services which results in the economy deteriorating even further. Although the Canadian dollar is getting closer to the US dollar, Canadian businesses will still have to lower their prices for the US since they are our biggest trading partner. Therefore, if the US is in trouble, Canada will be involved as well. As for internal control in the company, a company should never overdue it. Investing too much into internal control can make the company very safe, but it will be very pricy and might not really be worth it in the end.
