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Financial Management

In terms of currency denomination, discuss how IBM prices its revenues and costs. What means do they use to hedge against exchange rate risk? What do you think would be the effect of increases/decreases in the dollar's exchange value on the firm's profitability?

The response addresses the queries posted in 1784 words with references.

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The response addresses the queries posted in 1784 words with references.

//In this paper we are going to discuss about the US based multinational company which has its operations in various countries of the world. The main aim of this paper is to find out the pricing method for the product and services of the company in the market in terms of foreign currency denomination.//

Abstract

This paper is basically concern with selected company that has its operations across the globe, so that it can be possible to evaluate the pricing strategy of the chosen company with respect to its products and services in the home country as well as foreign country. As such, the organization that has been chosen is IBM Corporation. The paper starts with the brief introduction of the company and its methods used for the pricing for their revenue and costs in the market. After the discussion of pricing methods used by the company the author has discussed about the methods which are used in increasing the profitability of the company. The author has also mentioned the exchange rate risk minimizing techniques which are used by the IBM Corporations in their business. At the end of this paper author has discussed the effect of increases/decreases in the dollar's exchange value on the firm's profitability in the international market.

Introduction

International Business Machine Corporation (IBM) was established in 1910 and it is based in Armonk, New York. The main business of the company is to manufacture the information technology products and services worldwide. The business of IBM is spread in almost every part of the world. The global service segment of the company provides the professional services to its clients and also provides the outsourcing facility to the client companies. In the software segment, the company offers the middle-ware and operating system software to the clients to manage their business in market. IBM Corporation has its branches and offices in many countries of the world, and from all offices it is getting revenue which it needs to convert into dollars while reporting in their financial statements. All the offices are fully owned by the company and it needs to manage it's all the cost of operations throughout the year in the foreign country (IBM, 2010).

//In this part of the paper we are going to discuss about the pricing methods used by the IBM Corporation for their revenue and costs in the market.//

Pricing method for the revenue and cost in the market

IBM offers its products and services to the large market space all over the world. Due to its global operation, it needs to price its revenue and costs in terms of foreign currency denomination, so that it can measure the correct value of its manufacturing cost, cost of operation of business in other country. It is very necessary ...

Solution Summary

The response addresses the queries posted in 1784 words with references

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