How exchanging rate affected Avon Products Inc.? And how the company is protecting itself from it?

Expert Solution

Avon Products, Inc. is an international marketer and manufacturer of beauty and related products. Foreign-exchange risks are the risk of loss that arises because of the changes in the international exchange value of national currencies. Since the company has it's operations in multinational country therefore a slight change in the foreign exchange rate may impact Avon either positively or negatively. The changes in exchanging rate have a considerable impact on company's assets, cash flow, financial position and earnings.

The company take care of the macro economic factors such as savings rate, interest rate, inflation rate, and foreign exchange rate. Avon to a great extent is aware of the economic cycle of the specific nation where is operating or where is plans to open its new subsidiary. The company, time by time uses risk management and foreign currency hedging strategies to reduce its exposure to fluctuations in cash flows and earnings linked to movements in rates of foreign exchange.

Rahul Sunny answered 1 year ago

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How exchanging rate affected Avon Products Inc.? And how the company is protecting itself from it?

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How Inflation and Exchange rate affected Avon Products Inc.?

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