The Financial Aspects of Doing Business in Mexico
Date of Submission
1980
Document Type
Thesis
Degree Name
Master of Science in Accounting
Department
Accounting
LCSH
Corporations,American--Mexico, Foundation garment industry--United States--Finance, Mexico--Economic conditions
Call No. at the Univ. of New Haven Library
AS 36 .N29 Acc. 1981 no.4
Abstract
The Financial Aspects of Doing Business in Mexico is an analysis of the accounting and operational areas involved in operating a manufacturing facility in the U.S.- Mexican border area of Mexico. The manufacturing operation is Juarmex, a wholly owned subsidiary of a U.S. company in the Apparel Industry. The purpose of this analysis is to examine the financial benefits of operating an assembly plant in Mexico, and the operational advantages and disadvantages.
Accounting standards and requirements in Mexico have been examined to depict the role of the public accountant, the financial records of a Mexican corporation, the tax structure in Mexico, and foreign exchange fluctuations.
The effect of U.S. Customs laws on the operations and the profitability of Juarmex through the valuation of merchandise imported into the United States from Juarmex, the imposition and collection of duties, and the accounting requirements necessary for proper filing with U.S. Customs is examined in detail. The requirements of Mexican Customs laws, although not as stringent as U.S. Customs laws, have an effect on the operation of Juarmex in the areas of import controls, and the timeliness of the movement of merchandise across the border.
The primary impetus for operating in Mexico is lower labor costs than those in the United States. Salaries, wages, and fringe benefits paid by Juarmex are compared to those paid in a similar operation in the United States. A comparison of operating in Mexico versus operating in the United States provides insight into the factors involved in the production costs, and identifies lower wage rates as the primary factor contributing toward lower costs for Juarmex.
Mexican labor unions, economic factors, and governmental influences are examined to show current and potential effects. A favorable manufacturing environment and operational factors provide the basis for a substantial financial benefit from operating in Mexico for an assembly operation such as Juarmex.
Recommended Citation
Nelson, Steven, "The Financial Aspects of Doing Business in Mexico" (1980). Master's Theses. 44.
https://digitalcommons.newhaven.edu/masterstheses/44