Ziroat Tosheva Aliqul Qizi

Anum Ikram
Group Assignment #4

FX exposure

Please test your strategy not only under EUR=315, CZK=11.4 and BUBOR=0.0211 or
EURIBOR=0.00263 but under the following unlucky conditions as well: EUR=400,
CZK=20 and BUBOR=0.08 or EURIBOR=0.04. What is happening with your pre-tax
margin? If you are under the market average of pre-tax margin=30%, how could you
modify your own strategy to perform better?

We measure the impact of transactional FX exposure on profitability.

Income Statement with original conditions:

Czech (CZK) Austrian (EUR) Hungarian (HUF) Group (HUF)

84,259,919 1,061,320 2,192,171,125 3,487,050,000
railway usage fees 52,808,771 345,815 115,768,116 826,719,830
fuel or electricity 23,337,148 321,677 85,298,616 452,670,357
maintenance 0 0 37,975,000 37,975,000
rent 0 20,544 0 6,471,360
wages 5,714,000 373,284 142,168,000 324,892,060
depreciation (vehicle) 0 0 37,975,000 37,975,000
depreciation (building) 2,400,000 0 48,000,000 75,360,000
0 0 1,724,986,393 1,724,986,393
subsidiaries 0 0 0 1,724,986,393
gained interests 0 0 0 3,251,025
paid interests + hedge 0 0 0 50,400,000
0 0 0 1,677,837,418
0 0 0 318,789,109
0 0 0 1,359,048,308
0 0 0 271,809,662
0 0 0 1,087,238,647
Pre-tax margin 48.12%

Income Statement with unlucky conditions:

The pre-tax margin is still 41.24% which is above the industrial average (30%), so no
modification is required.

Czech (CZK) Austrian (EUR) Hungarian (HUF) Group (HUF)

84,259,919 1,061,320 2,318,273,621 4,428,000,000
railway usage fees 52,808,771 345,815 115,768,116 1,310,269,536
fuel or electricity 23,337,148 321,677 85,298,616 680,712,375
maintenance 0 0 37,975,000 37,975,000
rent 0 20,544 0 8,217,600
wages 5,714,000 373,284 142,168,000 405,761,600
depreciation (vehicle) 0 0 37,975,000 37,975,000
depreciation (building) 2,400,000 0 48,000,000 96,000,000
0 0 1,851,088,889 1,851,088,889
subsidiaries 0 0 0 1,851,088,889
gained interests 0 0 0 39,045,000
paid interests + hedge 0 0 0 64,000,000
0 0 0 1,826,133,889
0 0 0 346,965,439
0 0 0 1,479,168,450
0 0 0 295,833,690
0 0 0 1,183,334,760
Pre-tax margin 41.24%