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Exposing Apple's FX Transaction Risk

Apple is the most valuable company in the world, and in 2015 impressively captured not only the largest market cap, but also the largest sales, profits, and assets among the world's biggest technology companies.

-Forbes, "The World's Largest Tech Companies: Apple Beats Samsung, Microsoft, Google"

As a result, it's no surprise that many businesses look up to Apple to follow their lead in terms of research and development, manufacturing, and sales among other areas of innovation. However, many multi-national firms can also benefit greatly from observing Apple's best practices as it relates to identifying and managing foreign currency transaction risk.

Apple’s unaudited summary financial results for the fiscal 2015 fourth quarter revealed that international sales accounted for 62 percent of the quarter’s revenue, which totaled $51.5 billion dollars. This highlights that in a matter of 3 months, the equivalent of almost 30 billion US dollars worth of product was sold overseas, and more than half of their revenue in a single quarter was generated from outside of their headquarters in the United States. Apple's sizable revenue generation is just one component of their foreign exchange risk profile.

Taking a more comprehensive view of Apple's foreign exchange risk profile, the following 7 minute video clip from FX Initiative's newly released course titled "FX Risk Exposures" exposes the various types of foreign currency transaction risk inherent in Apple's global business model.

 

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Cheers to your global organization's continued success in the new year,

The FX Initiative Team
support@fxinitiative.com



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