Thought Leadership Courtesy of FiREapps
As we look forward to the new year, three factors will have a large impact on currencies around the world: the changing landscape of digital currencies, U.S. tax reform, and the continuation of the U.K.’s split from the European Union.
Cryptocurrencies will not gain widespread traction with corporations and governments as long as questions about their volatility, risk, volume and shadowy affiliations linger.
Currency awareness allows companies to manage exposures to the point that the impact to their balance sheets is less than a penny EPS – and impacts to cash flow immaterial (relative to EBIDTA).
CFOs cannot control currency volatility, but they can ensure their teams understand and address how changes in global currencies impact an organization.
An increasing number of businesses are now incorporating process improvement practices—such as Lean, Six Sigma, and kaizen—into their financial risk management processes.
In cross-border M&As, differing interest rates can create interest-earning opportunities for the acquiring company. If the acquiring company purchases an inflationary investment, the acquiring company may still earn interest if it hedges its investment. In other words, acquiring organizations generate income while hedging their investment.
One year after the United Kingdom European Union referendum, currency exposures are top of mind to board members, CEOs and CFOs.
Confidence in currency risk begins with analyzing comprehensive data.
Concerned about your organization’s global currency exposure? Managing risk begins with analyzing timely, comprehensive data.
Following UK's Brexit decision, Wolfgang explains how companies are being impacted by the currency market volatility and what steps treasurers are taking to mitigate the risks.