Often businesses operate in multiple currencies, but also want the ability to view all their numbers consolidated into one main currency. There are a number of ways to do this in Causal, so let’s look at one of the more popular approaches.
For example, you might have four different line items for your main revenue stream. Each of these refers to the revenue from the four main regions your organization operates in, and expresses it in the local currencies of each region.
- Revenue - US
- Revenue - EU
- Revenue - UK
- Revenue - AUS
The first step in Causal is to make sure our geographies are a Category (see Categories for more info).
Have your Revenue variable use the Geography category. This can be done in two ways:
Explicitly: Add the category by clicking on the category icon. This will add the different geographies, however it will also force each line to have a separate formula (forecast).
Inherit: This is the preferred method for calculations, as you have a consistent formula across all of the category items. To do this you should have your forecast calculation in the formula bar with one or more of the inputs already containing the category. This way your Revenue will “Inherit” the category from the input/s.
Connect your data sources to the correct lines using the data icon on each item:
Now we have a revenue line that has multiple currencies in each region. It is best practice to:
a. Rename the revenue variable to “Revenue (local)” or another descriptive title that reminds you that each line here is a different currency
b. Change the category aggregation to “None”. This will prevent mistaking the summed up value of multiple currencies as a true figure.
Create an FX Rate input. This will have a different value for each geography, so we want to explicitly add it (see above). Be descriptive about the title so you know whether to divide or multiply by the FX rate. And make sure to use 1 for the value that is already in the base currency.
Multiply or divide your local Revenue by the FX rate to get your base revenue
Revenue (base) =
Revenue (local) /
FX rate local / USD
Let us know what FX conversion methods you use in Causal!