January 2023 Newsletter New Year Knowledge: Read our January newsletter and discover the latest blog posts and insights from FX Initiative on currency risk management. We help finance, accounting, treasury, and sales professionals stay up to date with new training content, CPE webinars, and helpful tips & resources. Scale the learning curve quickly and easily with our foreign exchange risk management training, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples and events at FXCPE.com. Start Training > View Newsletter January 3, 2023By FX Initiative General accounting, business, cash flows, commerce, CPE, currency, derivatives, development, earnings, economics, EPS, exchange, finance, foreign, fxcpe, fxinitiative, global, hedging, initiative, international, management, payments, professional, risk, training 0 0 Comment
White Label FX Web Applications FX Initiative's white label web applications are designed to help treasury professionals and FX sales teams with a wide variety of foreign exchange (FX) risk management challenges and opportunities. Whether you are creating a FX risk policy or analyzing economic and accounting scenarios, our risk models and strategy simulations share best practices in easily understandable formats. Examples include: FX Risk Policy FX Terms Glossary ISO Currency Codes Foreign Subsidiaries FX Revenues FX Expenses FX Receivables FX Payables FX Spot Transactions FX Forward Contracts FX Option Contracts FX Zero Cost Collars Our white label web applications are branded with the client's logo and embedded as an iframe into the client's website. An iframe is one of the most convenient HTML structures, and is an embedded window on the client’s web page that shows content hosted on FX Initiative’s servers. In 4 simple steps, our solutions can be deployed on the client's website quickly and easily with minimal technology resources. Learn More September 27, 2022By FX Initiative General, Partnerships accounting, business, cashflows, collar, corporate, CPE, cuurency, derivatives, development, economics, exchange, FASB, finance, foreign, forex, forward, fxcpe, fxinitiative, global, hedging, IASB, initiative, international, management, option, payments, policy, professional, risk, simulate, strategy, trading, training 0 0 Comment
Grasping Groupon’s Passive FX Risk Management FX Initiative analyzes how publicly traded companies manage foreign exchange risk. This analysis will focus on Groupon, a Chicago based worldwide e-commerce marketplace, and their passive approach to FX risk management. Using their 10-Q for the quarterly period ended June 30, 2017, let’s explore Groupon’s International segment and its FX impact on their Income Statement. The Income Statement shows a company’s revenues and expenses during a particular period. The Income Statement in simplest terms totals revenues and subtracts expenses to find the bottom line or net income for the period. Using Groupon’s reported numbers from their Securities and Exchange filing, their International segment’s Income Statement is as follows: Source: http://investor.groupon.com/secfiling.cfm?filingID=1490281-17-111 The words "foreign exchange", "foreign currency", and "FX" are mentioned 12 times in their earnings announcement, yet Groupon (unlike leading technology companies such as Apple and Google) is not managing their foreign exchange risk at all. Let’s examine Groupon’s FX risk profile by digging into their revenue, expense, and gross profit figures. Revenues - Groupon’s revenue increased $27 million in their International segment, but declined $13.8 million due to changes in foreign exchange rates. In other words, Groupon intentionally grew their International revenue by increasing transactions in their Goods category, but unintentionally lost over 50% of that growth due to unhedged foreign exchange risk. Expenses - Groupon’s International segment expenses (cost of revenue) increased $29.9 million, but declined $6.9 million due to changes in foreign exchange rates. This increase in expenses was attributable to increases in direct revenue transactions in their Goods category, and unhedged FX risk reduced those expenses favorably but unintentionally by roughly 23%. Gross Profit - Groupon’s International segment’s gross profit declined by over $19 million or nearly 10%, and $6.9 million was lost due to unhedged foreign exchange risk. Not only did Groupon’s International segment report lower gross profit across all three of their Local, Goods and Travel categories, they lost even more money as a result of not managing their FX risk exposures. Groupon’s International segment accounts for approximately 30% of their total revenue, which is a material amount. In comparison, Apple’s International sales accounted for 61% of their third quarter 2017 revenue, and they were awarded the Best Corporation in the World for FX Management by Global Finance Magazine in their 2017 Corporate FX Awards. Whether you are a shareholder, vendor, creditor, employee or layperson, do you think Groupon should be managing their foreign exchange risk? FX Initiative’s training uses real world examples from Apple to demonstrate how multinational corporations like Groupon can significantly improve their international performance by employing currency risk management best practices. If you are interested in learning how your organization can improve their foreign exchange risk management program, sign up for FX Initiative’s currency risk management training today. Our educational videos, interactive examples, and webinar events simplify complex FX risk management issues and equip you with actionable intelligence to effectively mitigate FX risk. Ready to learn FX Risk Management Best Practices? Click here to get started! The FX Initiative Team support@fxinitiative.com September 18, 2017By FX Initiative FX Risk Management, General , 10 Q, Apple, Best Practices, Continuing Professional Education, CPE, Google, Groupon, Initiative, Losses, Management, Reporting, Risk, SEC, Currency, Earnings, Foreign Exchange, FX 0 0 Comment
Learn How to Take the FX Initiative Did you know? Fortune 500 companies are holding more than 2 trillion dollars overseas. That’s a lot of money! Some may think there’s tons of U.S. dollars abroad. The truth is...this money is foreign currency from company revenues, expenses, receivables, payables, assets, liabilities, and equity. That’s a lot of foreign currency! And a lot of currency risk! Global companies face questions of how to manage currency risk? How to draft a FX risk policy? Where to look for FX risk exposures? What currency risks to hedge and how? Which strategies meet FX hedge objectives? What are the economics? How to do FX accounting? That's a lot of questions! It's time to take the FX Initiative! FX Initiative's foreign exchange risk management training starts with watching our online video series about: Foreign Exchange (FX) Market Overview FX Risk Exposures FX Risk Management FX Spot & Derivatives Hedging FX Transactions Hedging Foreign Subsidiaries Then, review and test with quizzes and CPE exams. And reinforce learning using real examples with our: Currency Code Locator FX Risk Policy Drafter FX Derivative Speculator FX Transaction Simulator FX Subsidiary Consolidator FX Initiative training is available 24/7 365 to help you with FX risk policies, FX accounting, FX hedging strategies, and FX risk management. Are you ready to manage FX risk? Take the FX Initiative by subscribing today! Want to take the FX Initiative? Click to subscribe today! If you found this information insightful, become a FX Initiative subscriber today and access our complete suite of foreign exchange (FX) continuing professional education (CPE), examples and events at FXCPE.com. Managing FX risk has become a higher priority for many firms for 2017 and it is now easier than ever to learn the fundamentals of currency risk management. Make this the year to reduce FX risk and reap rewards abroad by taking the FX Initiative for your international business today! Click here to subscribe > Cheers to your global organization's continued success in the new year, The FX Initiative Team support@fxinitiative.com February 13, 2017By FX Initiative General Continuing Professional Education, Currency, FX, Initiative, Management, Risk, CPE, Foreign Exchange, How to 0 0 Comment