Foreign Currency Impact Kellogg included the following note in its fiscal 2015 1

Question

Foreign Currency Impact

Kellogg included the following note in its fiscal 2015 10-K report ($ millions).

Comparable net income attributable to Kellogg ............................. $1,257

Foreign currency impact................................................ (100)

Currency neutral comparable net income attributable to Kellogg ................ $1,357

a. Assume the foreign currency impact related entirely to foreign sales. Determine whether the $US strengthened or weakened vis-à-vis the currencies in which Kellogg conducts business.

b. Assume the foreign currency impact related entirely to purchases of goods from foreign vendors. Determine whether the $US strengthened or weakened vis-à-vis the currencies in which Kellogg conducts business.

c. As an analyst, how would we treat this foreign currency impact in our analysis of Kellogg?

Explanation / Answer

Answer:-

(a);-

(b).

(c).

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