Risk and Sensitivity Analysis

Risk analysis

Conducting business internationally in which foreign currencies are used automatically creates risks to businesses. Businesses can even have currency risks without crossing borders if competitors are international or if products they deal in are based in US Dollars.  Unmanaged risk can lead to significant losses to the bottom line, loss of competitive advantages, reduction in revenues, or financial distress of the company.  Identifying these risks is the first step to effectively managing them.

Castle Currency reviews corporate operations to determine areas of currency risk exposure, timing, and current methods used in currency exchange, reporting, and risk management.

Castle Currency Management will work with your company to conduct currency risk profiles to identify and confirm areas and relative magnitude of both straightforward and complex risks.  Timing issues, as well as the existence and magnitude of risk off-sets are examined.

Net risks are identified and quantified in a foreign exchange risk profile which would be used in the development of a sound Currency Risk Management Plan.  It is important that the exposure managed is the correct amount.  You can’t manage what you don’t measure.  This should be periodically reviewed to ensure the proper amount, neither too much, nor too little is being managed.  This will prevent adding undesirable risk.  If error is large, reducing the timeline should be considered.

Sensitivity analysis

Does your company know exactly how it would be affected should the dollar strengthen or weaken significantly?  What would happen if such a movement occurs in a very short period of time?  You should have the answer to these questions.

Castle Currency runs sensitivity analyses on different currency ranges to help define important triggers for your company.  We can help you incorporate these into a managed plan which can provide an answer to the affects a currency move would have on your company at any time.

A sensitivity analysis acts like a “stress test” of your operating results utilizing long-term historical data and predicative  modelling to provide different financial scenarios.

"Denial is common tactic..."
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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?"

"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?"

"How can you be sure you are effectively managing your risk?"

"Do you know what your risk is at any given time? Shouldn't you?"

"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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