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Foreign exchange risk of Tetra Technologies
Foreign exchange risk of Tetra Technologies
Tetra Technologies' operating results and cash flows for particular subsidiaries remain underlying to foreign currency risk due to having businesses abroad. The operations of several Tetra`s subsidiaries are exposed to fluctuations between the U.S. dollar and certain foreign currencies. Since the Company plans to grow, its international operations could cause this exposure from fluctuating currencies to increase.

Foreign currencies exchange rates fluctuated significantly compared to the U.S. dollar, and the exchange rate volatility is expected to continue. Considerable fluctuations in foreign currencies against the U.S. dollar might adversely affect the balance and results of Tetra technologies operations.

In Firm's European operations, it is exposed in relation to operating payables and receivables denominated in Euros as well as other currencies; still, abovementioned operations are not suitable for long-term contract terms. The amount of such foreign currency exposure is not determinable or considered material.

Tetra technologies utilize the long-term borrowings as a hedge to its investment in acquired foreign operations, therefore currently. The firm has no party to a foreign currency swap contract and other derivative instruments which are designed to further hedge Firms currency exchange rate risk exposure. Its exchange rate risk exposure related to these borrowings is considered to be generally offset by the fluctuations in the value of the related foreign investment.

Still, the Company is exposed to large FX risks, and as one of the key points of risk-management approach it may introduce VAR limits management. Aiming to learn more about this topic you may need custom research projects from professional paper writers. Our paper writing services are created to contribute to your academic success.