Business Risks Companies Face

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 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

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