Foreign Exchange Risk Management Policy: Summary Elements

It is the nature of your operating cycle, of your operations that determines the sensitivity of your profitability to currency fluctuations.

Foreign Exchange Risk: Defining a cash flow

Running a company is no small task. Identify potential customers and win them over; finance and develop the company; in short, manage an operating cycle efficiently, from beginning to end.

Choose to cover yourself (or not) on a factual and non-emotional basis

Changes in the value of the Canadian dollar can significantly impact the profitability of a company and the valuation of its operations abroad (import and/or export).

Foreign currency Risk

Currency risk is the risk that a company’s financial situation might be affected by variations in exchange rates. This risk is especially present for companies that trade in more than one currency.