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Proper valuation of foreign currency (FX) cash flows is critical to assessing the effect of currency exchange on your company’s forecasted cash plan. Equally important is ensuring all underlying currency exposures are identified in order to determine the total risk to your company of adverse exchange rate fluctuations. In this course you learn how to translate the exchange value of projected FX cash flows and to recognize currency market risk in your underlying business operations.

In the case presented, a business has contracted export sales for one year denominated in the local currency of the customer. We work through and calculate the proper valuation of the projected FX cash flows taking into account both current and future FX rates as priced in the global currency markets. Also provided are tips to identify currency market risk within your company inherent when businesses source or sell in the global marketplace.

This course provides the know-how to apply the essential FX valuation calculations and market protocols useful for Corporate Treasury and Finance for cash planning and FX risk management purposes.

Learning Objectives

  • Recognize the market protocols for quoting FX prices in the currency markets.
  • Recognize the FX rates for spot and forward currency value calculations.
  • Explore the FX market volatility between two currencies.
  • Identify the underlying currency exposure in global business contracts. 
Last updated/reviewed: April 12, 2018

2 Reviews (10 ratings)Reviews

4
Anonymous Author
Overall good review of FX calculations.
4
Anonymous Author
Good overview of FX exposure.

Prerequisites

Course Complexity: Advanced

No advanced preparation or prerequisites are required for this course.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  5:01Introduction to Valuing Your Businesses' Foreign Currency Cash Flows
FX Cash Flows
  7:12Market Protocol
  7:00Foreign Currency Valuation Scenario
  5:12Assessing FX Risk and Market Volatility
CONCLUSION
  6:44Summarize Treasury's Actions and Identify FX Exposure
Continuous Play
  31:09Valuing Your Businesses' Foreign Currency Cash Flows Full Video
SUPPORTING MATERIALS
  PDFSlides: Valuing Your Businesses' Foreign Currency Cash Flows
  PDFValuing Your Businesses' Foreign Currency Cash Flows Glossary Index
REVIEW and TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM