Glossary

Constant currencies is a term that refers to a fixed exchange rate that eliminates fluctuations when calculating financial performance figures. Companies with significant operations in other countries often represent their earnings in constant currency terms since floating exchange rates can often mask true performance. Since the performance of a company is accurately depicted by its revenue and profit metrics, accounting for the same by fixing the exchange rate at the prevailing value or that of the previous year is often done to give a clearer picture to management, analysts and investors.