INT650 Southern New Hampshire University Risk Mitigation Strategies Paper THE COMPANY IS JP MORGAN AND CHASE Overview: For this milestone, due in Module F

INT650 Southern New Hampshire University Risk Mitigation Strategies Paper THE COMPANY IS JP MORGAN AND CHASE

Overview: For this milestone, due in Module Five, you will analyze risk mitigation strategies for your selected company. Additionally, you will calculate the impacts foreign currencies have on the overall revenue and profit structure of your selected company.

Prompt: First, review the annual financial statements (Form 10-K) for your selected company. You can either retrieve the statements from the webpage SEC EDGAR Company Filings or directly from the company’s website, often listed under “Investor Information.” Review the Module Five resources, including the website Historical Exchange Rates, and review the Module Three and Four resources.

Next, complete the spreadsheet Milestone Two: Foreign Currency Impact, which analyzes the foreign currency impact on your selected company. To complete this part of the milestone, you will need to review at least three years’ worth of annual financial reports.

Finally, complete the Final Project Milestone Two section in the Final Project Template. The paper should outline what hedging techniques your selected company is currently using. You need to research the annual statement and look for foreign currencies and their treatment, the derivative contract specifically used for hedging, and any other notes on hedging in the company’s annual financial statements. Further, you will need to analyze specific foreign currency transactions listed in the financial statements.

The following critical elements must be addressed:

? Section 2: Risk Mitigation Strategies

Determine current financial and strategic impacts of international risks to inform risk mitigation strategies. In other words, what kind of risks isyour company exposed to (translation, transaction, economic, operating, etc.) and why?
Explain how to mitigate foreign exchange rate risk.
Identify the tools the company is currently using to mitigate its foreign exchange risk. This should be done using the annual financialstatements.
Calculate the financial impacts of international foreign exchange risk to inform risk mitigation strategies. This will be done in an Excelspreadsheet. There are instructions in the spreadsheet to guide you step-by-step through the exercise.
Propose future mitigation strategies based on the prospective market for your corporation including addressing risks that are not currentlybeing efficiently mitigated for your corporation.

Be sure to reference your completed Final Project Milestone One document as well as any other pertinent course resources to support your responses. Incorporate instructor feedback on this milestone into your final project submission.

Guidelines for Submission: This milestone should be submitted as a Word document, 2–3 pages in length, double-spaced, using 12-point Times New Roman font, one-inch margins, and the latest edition of the APA manual for formatting and citations. Final Project Milestone Two Spreadsheet: Foreign Currency Impact
Step 1) Pull annual financial statements for your selected multinational firm for the last three years. Find overall company rev
Step 2) Pull the yearly average exchange rate between USD and each subsidiary’s currency. To find historical data, go to http:
Step 3) Go to http://www.xe.com/currencytables/.
Select December 31 and use it as the average yearly exchange rate for the year (not exactly correct, but average yearly rate r
Step 4) Calculate the impacts of the subsidiary revenue on the overall and company revenue.
Step 5) Calculate Scenario #1: Appreciate Dollar by 5%. What would happen to revenue from the subsidiary—would it increas
Step 6) Calculate Scenario #2: Depreciate Dollar by 5%. What would happen to revenue from the subsidiary—would it increas
Note: Although the spreadsheet is set up for three subsidiaries, your company might only have one, which is fine. More than
STEP 1: REVENUE TABLE
STEP 3: CALCULATE IMPACTS
201#
201#
STEP 2: AVERAGE YEARLY EXCHANGE RATE
201#
201#
201#
YEAR
201#
201#
201#
Overall Company Revenue
Subsidiary 1 Revenue
Subsidiary 2 Revenue
Subsidiary 3 Revenue
YEAR
201#
USD
Subsidiary 1
Local Curr
Appreciate Dollar Currency 5%
YEAR
201#
201#
201#
Appreciate Dollar Currency 5%
YEAR
201#
201#
201#
mpact
rs. Find overall company revenue and revenue for the subsidiary you have chosen to analyze.
d historical data, go to http://www.xe.com/currencytables/.
ct, but average yearly rate requires extra payment).
subsidiary—would it increase in USD terms or decrease in USD?
subsidiary—would it increase in USD terms or decrease in USD?
ne, which is fine. More than one is better, but the maximum should be three.
TEP 3: CALCULATE IMPACTS OF SUBSIDIARY REVENUE ON TOTAL REVENUE
Overall
Subsidiary 1 Rev Subsidiary 1 Rev
Revenue in
in Local Curr
in USD
USD
% of Subsidiary
% of Subsidiary
Revenue From Subsidiary 2 Rev Subsidiary 2 Rev Revenue From
Total Revenue
in Local Curr
in USD
Total Revenue
(USD)
(USD)
STEP 4: Scenario #1—Dollar Appreciates 5%
ppreciate Dollar Currency 5%. What would happen to revenue from the subsidiary—would it incrase in USD terms or decrease in USD?
Overall
Subsidiary 1 Rev
Subsidiary 1 Rev
Revenue in
in USD After 5%
in Local Curr
USD
Appreciation
% of Subsidiary
% of Subsidiary
Subsidiary 2 Rev
Revenue From Subsidiary 2 Rev
Revenue From
in USD After 5%
Total Revenue
in Local Curr
Total Revenue
Appreciation
(USD)
(USD)
STEP 5: Scenario #2—Dollar Depreciates 5%
ppreciate Dollar Currency 5%. What would happen to revenue from the subsidiary—would it incrase in USD terms or decrease in USD?
Overall
Subsidiary 1 Rev
Subsidiary 1 Rev
Revenue in
in USD After 5%
in Local Curr
USD
Depreciation
% of subsidiary
% of subsidiary
Subsidiary 2 Rev
revenue from Subsidiary 2 Rev
revenue from
in USD After 5%
Total Revenue
in Local Curr
Total Revenue
Depreciation
(USD)
(USD)
Subsidiary 3
Rev in Local
Curr
Subsidiary 3 Rev
in USD
% of Subsidiary
Revenue From
Total Revenue
(USD)
Subsidiary 3 Rev
in USD After 5%
Appreciation
% of Subsidiary
Revenue From
Total Revenue
(USD)
Subsidiary 3 Rev
in USD after 5%
Depreciation
% of Subsidiary
Revenue From
Total Revenue
(USD)
rms or decrease in USD?
Subsidiary 3
Rev in Local
Curr
rms or decrease in USD?
Subsidiary 3
Rev in Local
Curr

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