Beruflich Dokumente
Kultur Dokumente
Financial
Management
Plan:
Section I
1)The essence of international financial management
1.1 Concept and main functions of IFM
1.2 Nature & Scope
1.3 International Trade Theories
2) International Business Methods
Section II
3)General directions of International Financial Management
3.1 Capital Budgeting
3.2 Foreign portfolio investment
3.2 Working capital management
3.3 Trade Finance
3.4 Letter of credit
3.5 Bank Guarantee
3.6 Collection and discounting of bills
3.7 Dividend Police
3.8 Risk management
The essence of
international financial
management
The essence of
international financial
management
The
main objective
management is to
wealth.
of international financial
maximise shareholder
Basic Functions
Basic Functions
-INVESTMENT DECISION
It is concerned with deployment of the
fund acquisition
investment financing
cash management
risk management
external reporting
Environment at
International Level
International financial management practitioners are
required the knowledge in the following fields:
the knowledge of latest changes in forex rates
instability in capital market
interest rate fluctuations
macro level charges
micro level economic indicators
savings rate
consumption pattern
investment behavior of investors
export and import trends
Competition
banking sector performance
inflationary trends
demand and supply conditions etc.
Political risk
Political risk ranges from the risk of loss (or gain) from
unforeseen government actions or other events of a
political character such as acts of terrorism to outright
expropriation of assets held by foreigners.
Expanded Opportunity
Sets
When firms go global, they also tend to benefit
International Trade
Theories
Theory of
Mercantilism
Theory of
Comparative
Cost
Advantage
Theory of
Absolute Cost
Advantage
Theory of Mercantilism
This theory is during the sixteenth to the threefourths of the eighteenth centuries.
Theory of Mercantilism
Mercantilists failed to realize that simultaneous export
Theory of Absolute
Cost Advantage
Theory of Absolute
Cost Advantage
Theory of Comparative
Cost Advantage
Theory of Comparative
Cost Advantage
Theory of Comparative
Cost Advantage
International Business
Methods
Licensing
Franchising
Subsidiaries and Acquisitions
Strategic Alliances
Exporting
Licensing
Franchising
Subsidiaries and
Acquisitions
Strategic Alliances
Section II
General directions of
International Financial
Management
Capital Budgeting
Methods of capital
Budgeting
Payback period
Profitability index
Equivalent annuity
These
methods
use
the
incremental cash flows from
each potential investment, or
project
Availability of funds
Structure of capital
Taxation Policy
Government Policy
Earnings
Capital Return
Working Capital
Accounting Practice
Trend of Earning
Foreign Portfolio
Investment
Working Capital
Management
Working capital management is concerned with the problems that
business can be, or will be, converted into cash within one year
without undergoing a diminution in value and without disrupting
the operations of the firm.
Examples- cash, marketable securities, accounts receivable and
inventory.
Current liabilities are those liabilities which are intended, at their
term funds
Determinants of Working
capital Requirement
Production cycle
Production policy
Credit policy
Profit level
Level of taxes
Dividend policy
Depreciation policy
Operating efficiency
Trade Finance
Letter of credit
Bank Guarantee
Letter of Credit
It
Bank Guarantee
Collection and
Discounting of Bills
It is a major trade service offered by the Banks.
Dividend Policy
Risk Management
Methods of risk
management
Identify, characterize threats
Assess the vulnerability of critical assets to
specific threats
Determine the risk (the expected likelihood and
strategy
Principles of risk
management
create value resources expended to mitigate risk should be less than the consequence of inaction, or (as in
value engineering), the gain should exceed the pain
be tailorable
Conclusions