Hi everyone. A quick question from first time poster - long time lurker.
I've moved to a new role recently where I am looking more at multinationals (MNCs) rather than just corporations with single country operations. This means I'm having to deal with the practice of MNCs reporting their financial performance in terms of the reported amounts and a "constant currency" amount.
Given the volatility in exchange rates during the last quarter of 2008, this is producing some pretty significant variations between the 'reported' and 'constant currency' figures.
So my questions are
- when is it more appropriate to use the reported figure and when should I used the 'constant currency' figure?
- what can the variations between the figures tell me about the company performance or operations?
- any other issues/ insights / tips