Opinion in "McDonald’s first quarter revenue drop "

The main idea of Tewodros' article is that even though McDonald's sales increase, thier profits decrease due to foreign currency flcutuation and company’s raw materials such as ingredients of burgers and salads costs go up. Tewodros suggested that McDonald should hedge with third party to exchange McDonald’s foreign currencies into close the value of current U.S dollar. In addition, by making forward contract, McDonald could buy their raw material with fixed cost in contracted period. I agree with hedging against the raw material part, but I disagree with the way Tewodros suggested to McDonald to overcome the foreign currency fluctuation.
I would suggest McDonald to use "triangle arbitrage" between different markets to make profits. For example, McDonald makes profits in German with M 100,000(mark), and McDonald could exchange M 100,000 into $(U.S) 100,000 in the past. However, McDonald would exchange M 100,000 into $(U.S) 95,000 in current period due to currency fluctuation. Tewodros said McDonald should find third party entities to hedge the exchange process, but I think in the real situation McDonald would be hard to find third party entities to exchange Mark currency into U.S dollar at close value of current U.S dollar. I suggest McDonald to make profits from “triangle arbitrage”, and this is let’s suppose M 100,000 is equal to $ 95,000 and 1,000,000 Japanese yen in London since 1,000,000 Japanese yen is equal to M 105,000 and $ 100,000 in Japan. McDonald could make $ 5000 profits using “triangle arbitrage”. In order to make profits from “triangle arbitrage”, McDonald should fully understand how the one currency affects to the other currencies.
Tewodros suggested McDonald to grow own raw material such as lettuce, tomato, pickles, and etc in the long-term. However, I suggest that before McDonald grows their own agricultural products, they should calculate Net Present Vale and Risk Adjusted Return on Capital to whether they would make profits from that project.

http://kasmo83.blogspot.com/2009/03/mcdonalds-first-quarter-revenue-drop.html

http://www.gocurrency.com/import-risk.htm