国际金融终极定稿版.docVIP

A Brief Analysis of Dilemma in VSC Jiang Xi University of Finance and Economics International Accounting Class 2 WuPian FangYiXue WenYaQing QianChen LiuYuQi (0084128 0084125 0084119 0084109 0084121) Abstract: The aim of this study is to analyse some problems and defect that Vanguard security Corporation (VSC) meets, at the same time to explore the way to solve it. This study uses financial reports, the bid management and exchange rate risk management as factors that affected the operation of VSC. And the result also suggests that using correct decision in fluctuate exchange rates seems to be related to the growth of the company. Key words: International transaction; exchange rate between $ and €; financial reports 1.Introduction Vanguard Security Corporation(VSC) which is in Europe entered the U.S market, but it soon met a unanticipated drop in currency exchange, without good risk management it would cause VSC a large sum of money loss. At the same time, the increasing competition attacked VSC a lot, revenues and profitability had declined during past several years, several funding owners cashed out, many top manage leave from VSC, it needs to some method to develop a new customer base. And then, VSC was attracted by a new project, but its financial reports was asked for the bid. A healthy financial reports affected whether VSC would win the bid. VSC would paid for €109.5 million or $161.03 million for the bid according to the exchange rate between $ and € at that time. However, the total payment was included three parts:1) $16.103 million had already been received on May 16, which was 10 percent of the total payment; 2)Service and warranty agreement(6 years) for 12.0 million euro, which equals 17.6472million USD, which was 11 percentage of the total payment.Here we ignore to analy this part because no one would know the exchange rate six years later, and it did not play an important role in total payment, just 11 p