Apologies if this is an extremely basic question.
I had a case study in the past where the company's sales were influenced by FX rates. The PM gave me a simple XLS file with the FX neutral total revenue growth over the past quarters.
I'd like to understand what the best practice would've been in laying out the financials. Just compute the relative FX adjustment in each period and apply it to the filings?
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Company’s will typically disclose in their earnings release both total growth and FXN. For example they may say revenues grew 10% in the quarter but 7% excluding fx, meaning fx was a 300bps tailwind to the quarter. Most investors are going to focus more on fxn growth as it’ll tell you the underlying comparable growth but you’ll still need to model fx impacts going forward
Yeah I am more asking about periods further back, i.e. you wouldn't have FX neutral growth P&L laid out for FY 2021 for example.
You wouldn’t lay out a full pnl typically you’ll just have a hard coded fxn growth row for each period. I suppose you could grow revenue by the fxn rate if you wanted to, but not sure why that’s relevant to look at.
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