Businesses face significant risk to currency movements.
Anticipated Revenue/Expense Risk
‣ Anticipated revenues/expenses can be multi-year budget projections, signed contracts, or other commitments.
‣ Management of anticipated revenue/expense risk would attempt to protect and enhance longer term contracts, commitments, future projections, or business operations.
Earnings/ Cash Flow Risk
‣ Currency moves are typically found to affect budgeted revenues, earnings and cash flow by about 50% of the move over the current fiscal year.
‣Management of Earnings Risk would attempt to provide revenues and earnings near or above the expected budget amounts of the current year.
Repatriation Risk
‣Currency moves can have significant effect on the worth of profits repatriated from foreign holdings.
‣Management of Repatriation Risk would attempt to protect or enhance projected residual profits from foreign holdings and subsiduaries.
Debt Risk
‣ Currency moves can have significant effect on both the principle and interest payments of foreign denominated debt.
‣ Management of Debt Risk would attempt to protect or decrease principal amounts while also protecting or decreasing the interest payments.
Investment Risk
‣ Currency moves can have profound effects on investments and their returns.
‣ Foreign holdings and subsidiaries can suffer significant currency translation losses upon consolidation or diverstiture.
‣ Management of Investment Risk would attempt to protect or increase the capital as well as any cash flows.
Competitive Risk
‣ Currency movement effects the competitiveness of many companies business both abroad and locally.
‣ Management of Competitive Risk would involve assessing and protecting pricing levels at which competitors can access the company’s clients.
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Business Risks Companies Face
"What types of risks can currency movements cause to a business?"
Currency Movement Risks
"What different types of currency movements should I be concerned of?"
Hedging Strategies
"You may already have strategies to manage your risk, see why Castle Currency provides effective strategies which can add to your existing ones"
Conversions - Best Rate
"you can capture a significant amount of money by improving the rate you get for conversion – let us help"
Risk Analysis
"It is important that you are managing the proper risk amount. We can help ensure it is neither too much nor too little"
Sensitivity Analysis
"Do you know what effect a significant currency move would have on your bottom line? We will show you then help you do something about it"
Risk Audits
"Have a third-party review your internal operations, it removes potential conflict and provides objectivity"
Currency Risk Management Plan
"Could you benefit from a Currency Risk Management Plan?"
Centralized Foreign Exchange
"Do you have one division buying USD at the same time another is selling?"
Training
"Could your team benefit from more knowledge of currency risks and how to mitigate them. We would love to show them how"
Budgeting Currency to Margins
"Does it not makes sense to customize your currency risk management strategies to meet your margin expectations and limitations?" We strongly believe it does "
Fully Managed Services
"We watch the currency markets 24 hours a day – why not focus your time on your core business?"
Benchmarking
"How can you be sure you are effectively managing your risk?"
Reporting
"Do you know what your risk is at any given time? Shouldn't you?"
Team
"Hire professionals who are experts at managing currency risk. Be aware of the difference between one who takes orders and conducts trades compared to one who analyzes not only the market but your specific business.
Risk Analysis
What is the worst-case scenario for your company right now?
Risk Management
"Denial is a common tactic that substitutes deliberate ignorance for thoughtful planning."
Currency Risk Management Plan
Developing an effective Risk Management Plan is an important part of any project
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