Present a brief and critical overview of AstraZeneca as well as its financial circumstances with special focus on things that will be relevant for their foreign exchange exposure: Where are they headquartered and what is their functioning currency? Where do they manufacture their products and/or source raw materials? Where do they sell their products? In what proportion? What are the main currencies they need? Etc. You may wish to use graphs or charts obtained from reputable sources. (approx. 400 words)
(20%)
Critically discuss the company’s current foreign exchange risk management policy (focusing on transaction/economic exposure). For this you will need to go through their latest financial statements (e.g. annual report) and/or other company documents and discuss if there is anything already in place (e.g. FX derivatives they may already have in their accounts, foreign currency borrowings, hedge ratio, etc.). Draw conclusions from this analysis. (approx. 700 words)
(25%)
Drawing on Q1 and Q2 above, summarise the company’s most important FX exposures, and analyse what hedging options they should use in the short- and long-term to manage their business effectively. Outline and critically discuss your recommendations on the FX hedging strategy, informed by (i) what we have studied about hedging strategies in the module, and (ii) current/forecast market conditions, in particular regarding relevant FX rates (e.g. if the price of the $US is expected to go up or down in the coming months, what does that mean for their hedging strategy?) You may wish to use graphs or charts obtained from reputable sources. (approx. 700 words)
(25%)
Finally, make your conclusions about the company’s current FX exposure and your own recommendations. Consider that this report will be read by people who have limited time on their hands and may only focus on your main findings and recommendations: use this space to focus on what’s most important; what are the main challenges when it comes to FX exposure and what is the best way forward? (approx. 200 words)
(15%)
To research this coursework use multiple resources: textbooks; FAME, the Financial Times; official company accounts and other reputable news sources/articles from journals/books. The quantity and quality of sources will be taken into consideration.
(10%)
Presentation, formatting and referencing:
(5%)
