# 💹 The effect of Currency Exposure on Shareholders Equity 💹#
When we invest, one important aspect to consider is our portfolio exposure to currencies. It is not important where the company is trading, but where and how is making business ‼️
Keypoints 🗝️:
- In which currency is the company getting paid?
- In which currency is the company paying their costs?
- Are they hedging?
- In which currency is their cash, investments & deposits?
I specially look at them in companies with business in LATAM, Africa or Asia. 🌎
One of the checks you make is looking at the "Other comprehensive income".
I remember that I was very confused the first time I look into a company from a developing country (Pakistan). 🇵🇰
It was a software company (Really good ones in Pakistan) and they seemed to be doing pretty well (Positive Income) but the equity was just decreasing. WTF?
Reason: They were very exposed to Pakistan Rupee!
⬇️Here you go ⬇️
They were collecting most of their cash in Ruppes...