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Assess the financial performance and condition of the organization. Then, conduct a SWOT analysis detailing the strengths, weaknesses, opportunities, and threats that may affect the organization. Finally, assess the quality of the decisions made by the company and provide recommendations for improvement. Skip to content. Estimating life insurance needs using the dink method. Maidique Campus. Better work, better grade Our customers willingly show their appreciation for good work. Porsche Case Study

Porsche Exposed 1. Usually, exchange rates are being determined by the foreign exchange market, also known as forex.

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Exchange rates can be classified as fixed or floating. Central banks determine fixed exchange rates, while the mechanism of market demand and supply determines floating exchange rates.

However, exchange rates can highly affect businesses, especially if they are operating abroad. Usually, when products are bought from a foreign country, their costs may change if the exchange rate changes. The same happens when products are sold to a foreign country. Exporting and importing Porsche Case Study are also affected by the changes in exchange rates.

If there is a depreciation of a domestic currency, the exports will be cheaper and exporting firms can benefit from such situation, while importing firms may face higher costs of imports. In contrast, an appreciation of the domestic currency does the opposite.

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In both cases, there is a group who wins and a group who loses. Changes in exchange rates can also affect production, especially for those firms who are producing domestically, but selling abroad. Therefore, these firms are exposed to risk while making some important choices, in deciding whether to increase their profit margin or reduce the foreign price. If the Porsche Case Study currency depreciates, those firms who import materials in order to make their products, will have to pay Porschw for them.

This can also generate a negative consequence for all consumers who purchase imports and those on fixed wages. A change in exchange rate can Cse to some catastrophic losses for large companies, meaning that they are constantly exposed to a huge Porsche Case Study. However, the impact of the exchange rate depends on some factors, including the elasticity of demand, percentage of imported raw materials, economic growth in foreign countries, inflation, fixed contracts, and existence of appreciation or depreciation.

As already stated, differences in exchange rates can also have a beneficial impact, since they provide Porsche Case Study greater certainty for importers and exporters. This encourages international trade and investment and contributes the government while helping it to maintain low SStudy of inflation. Currency Hedging Currency hedging represents a method, used by firms, which involves entering a contract to provide a protection from unexpected, expected or anticipated changes in currency exchange rates. It includes the usage of financial instruments, referred to as derivative contracts. For instance, when a firm has the obligation to deliver 2 million dollars in eight months, it can use currency hedging to avoid the risk incurred by the change in exchange rate.

Thus, the firm can successfully hedge this risk by entering a contract to buy 2 million dollars on the same day.

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By doing this, the firm Porsche Case Study purchase and sell in the same currency on the same day. Currency hedging is achieved by the purchase of options and futures contracts, in order to avoid financial risk. Some other ways of engaging in currency hedging involve the usage of loan denominated in a foreign currency, currency options, and cylinder options. However, in order to set up a hedge, firms are exposed to some costs. If the change in exchange rate fails to be favorable to the hedge, company can forgo any profit.]