onzilla

Holding Multinationals? Look Out for the Rising Dollar

your naive assesment on simply revenue % from overseas greatly simplifies the issue. there are numerous COGS / OPEX that are also incurred overseas.. defferred revenue can also be positively impacted (although a offset appears on the balance sheet in remeasurement). Additionally, many of these companies hedge income statment risk for these shorter horizon moves. Competitive dynamics also come into play with local currency prices both rising and falling. Bottom line, you have NEVER conversed with someone who knows more about this subject than myself and i can tell you that in general - revenue will decrease as reported by US GAAP but the effects on net income are harder to determine. And in the long run (assuming mobility of capital), it makes very little difference in the economic value of the enterprise.