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--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--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?