Managing Foreign Exchange Risk

Managing Foreign Exchange Risk
October 22, 2012 Posted by: Joe O'Leary

By JoeO'Leary

Rapid globalization has caught many otherwise healthy businessesoff guard. And most remain blissfully unaware of their exposure toforeign exchange rates until it's too late.

Japanese video game giant Nintendo Co., Ltd. has come far from itshumble beginnings as a small producer of playing cards back in1889. Now known for its blockbuster products such as Game Boy, theNintendo DS platforms, and the Wii, its revenues have grown to1,838 billion JPY in 2009, an increase of over 300 percent from the509 billion JPY in 2006. All in all, not a bad growth storyconsidering the worldwide recession of the past couple ofyears.

However, the company has not been immune to some competitive andeconomic pressures, as evidenced by the reduction in its full-yearprofit forecasts.

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