Jaguar - 1 Jaguar is faced with three types of exchange...

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1. Jaguar is faced with three types of exchange exposure. This includes the following transaction exposure, translation exposure as well as economic exposure Translation exposure-firms are faced with transaction exposure due to having receivables as we’ll as payables and these values might change due to various changes as a result of the contract being denominated in foreign currencies. Therefore Jaguars transaction exposure is arising from the various contractual cash flows which is the receivables as well as the payables. The realized profits on the exchange as well as the losses on exchange whether realized or even unrealized do arise from the settlement of the overseas liabilities . The US dollars exposure do come from the export sales to United States which are priced in US$. On the other hand the Jaguar company is exposed to the US dollars since it has got sales in t United States that generates US$. Jaguar Company is also exposed to DM, as it is in competition with Mercedes- Benz and Porsche. The company is also exposed to ¥ exposure since it may compete with the higher Priced cars from Japan As Jaguar may compete with higher priced Japanese cars such as Lexas. On the other hand the translation exposure normally occurs as a result of the fluctuations in the currency thereby affecting the company’s consolidated financial statements due to the foreign subsidiaries. Jaguar being a multinational company there is the consolidation process for
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