Work out exchange rate impact instantly with clear inputs, formula shown and shareable results.
Currency exposure is net, not gross: foreign revenue offsets foreign costs, and only the difference is exposed. Multiplying that net exposure by the rate movement gives the translation impact on home-currency profit, which is what a natural hedge is designed to shrink.
Net exposure
Net exposure = Foreign currency revenue - Foreign currency costs
Translation impact
Impact = Net exposure x (Current rate - Budget rate)
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.
Matching foreign currency costs against foreign currency revenue so the net exposure — and therefore the impact — is small without any derivative contracts.
Hedge what would materially affect covenants or guidance. Hedging everything is expensive and simply converts currency risk into carry cost.