From forward contracts to options: Presenting instruments mitigating foreign exchange risk
In a previous article (Foreign currency risk), we addressed identifying and measuring foreign exchange risk so it can be managed in such a way that the company remains focused on its core mission, its business operations, without being overly exposed to financial risks.
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).
The extent of foreign exchange risk
During the last few weeks, many items brought instability to the markets.
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.
