Executive Summary Aspen has become a public company with more risk adverse investors who want to invest in the core business of the firm and not assume any foreign exchange risk. Foreign exchange risk is a core risk to Aspen’s business because they have many customers outside of the United States. We believe that transferring this risk to the customers would limit Aspen’s growth on the foreign markets: Aspen should keep its current marketing strategy‚ which includes credit installment payments and
Premium Foreign exchange market Currency United States dollar
CONTENTS INTRODUCTION 2-3 CURRENCY RISK EXPOSURE WITHIN THE BUSINESS ENVIRONMENT 4 COMPANY MANAGEMENT OF CURRENCY RISK EXPOSURE 5 PRIMARY ALTERNATIVES IN MANAGING CURRENCY RISKS 6-8 RECOMMENDATIONS AND BENEFITS 9 CONCLUSION
Premium Foreign exchange market Exchange rate Forward contract
Introduction: Aspen is a software company which was established in 1982. The company mainly provides simulation solutions to process manufacturing companies. The main industry which the company focuses on is chemical processing. The entire idea began with the project of Advanced System for Process Engineering in MIT in 1976. This project was than acquired by Lawrence Evans whom founded Aspen. In a very short amount of time Aspen became a major player in the simulation part of the software industry
Premium United States dollar Currency Income statement
Hedging Tiffany and Co.’s Foreign Currency Exposure in Japan Prepared for the Board of Directors of Tiffany & Company D.A.M.M. Business Consultants June 15‚ 1993 Table of Contents Executive summary ………………………………… Risk of foreign exchange exposure in Japan ……… Overview of the Japanese Economy ………………. Industry analysis ……………………………………. Internal & external environmental analysis………. Financial analysis …………………………………... Hedging foreign exchange exposure ………………. Recommendation …………………………………… Appendices
Premium United States dollar Foreign exchange market Exchange rate
framework offers‚ however‚ few tools for currency risk identification and for choosing a proper hedging instrument. This Thesis seeks to help firms manage risks better by defining the currency risk exposures of a multinational corporation‚ by describing their effects on the cash flows‚ profit and loss and balance sheet of the corporation as well as by comparing the applicability of currency forwards and currency options in hedging these exposures. The exposure framework is constructed based on an extensive
Premium Foreign exchange market Exchange rate Currency
they are denominated in foreign currencies and they are translated at the current exchange rate. The three types of foreign currency exposure are; Translation‚ Transaction and economic exposures Translation exposure Translation exposure measures the effect of an exchange rate change on published financial statements of a firm. Translation exposure results when a multinational corporation (MNC) translates each subsidiary’s financial data to its home currency for consolidated financial reporting
Premium Futures contract Exchange rate United States dollar
MULTINATIONAL FINANCIAL MANAGEMENT Groupe 5 Case study ASPEN TECHNOLOGY INC.: Currency Hedging Review 1) What are Aspen Technology’s main exchange rate exposures? How does Aspen Tech’s business strategy give rise to these exposures as well as to the firm’s financing need? The main exchange rates exposures are: British pounds‚ Deutsch Mark‚ Japanese Yen and Belgian Francs. Aspen faces foreign currency risks due to sales and expenses in those foreign currencies. Expenses include R&D costs (20% of overall R&D
Premium Currency Foreign exchange market Short
Obermeyer‚ Ltd. Aspen‚ Colorado Wally Obermeyer deftly balanced his office keys and a large printout of forecasting data as he wheeled his mountain bike through the front entrance of Sport Obermeyer’s headquarters in Aspen‚ Colorado. It was a crisp November morning in 1992; Wally paused for just a moment to savor the fresh air and beauty of the surrounding mountains before closing the door behind him. Wally had arrived at work early to start one of the most critical tasks Sport Obermeyer‚ a fashion
Premium Gender Term Fashion
Aspen Technology Inc. 1. What are Aspen Technology´s main Exchange rate exposures? Aspen Technologic Inc‚ is firm specialized in the development of simulation software for customers in process manufacturing industries‚ particularly the chemical industry. Big part of the AspenTech earnings comes for the licenses of their existing products. The 52% of Aspen Tech’s software license revenues came from customers outside de United States. With most‚ but not all‚ of its expenses incurred in the
Premium United States dollar
Aspen Technology‚Inc.: Currency Hedging Review History and Overview • Specialized in the development of simulation software for customer in process manufacturing industries • Advanced System for Process Engineering (ASPEN) project conducted at the Massachusetts Intitutes of Technology (MIT) in Cambridge Massachusetts‚ from 1976 to 1981 • Founded in 1981 by Dr. Larry Evans‚ a professor of chemical engineering at MIT • Larry Evans"leadership in the development and application of integrated
Premium United States dollar