Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 14 views

    Finance Function in Global Scenario

    Uploaded by

    Preeti Agarwal
    International finance function involves the effective mobilization and utilization of foreign exchange funds in multinational enterprises. It includes concepts, techniques, and skills for managing funds consisting of foreign exchange. The scope of international finance includes foreign exchange markets, risk management, capital budgeting, and tax management for multinational enterprises. Recent trends in globalization include the emergence of integrated global financial markets, liberalization of markets, and innovations in financial services.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd

    Finance Function in Global Scenario

    Uploaded by

    Preeti Agarwal
    14 views15 pages
    International finance function involves the effective mobilization and utilization of foreign exchange funds in multinational enterprises. It includes concepts, techniques, and skills for managing funds consisting of foreign exchange. The scope of international finance includes foreign exchange markets, risk management, capital budgeting, and tax management for multinational enterprises. Recent trends in globalization include the emergence of integrated global financial markets, liberalization of markets, and innovations in financial services.

    Original Title

    Chap 01

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    International finance function involves the effective mobilization and utilization of foreign exchange funds in multinational enterprises. It includes concepts, techniques, and skills for managing funds consisting of foreign exchange. The scope of international finance includes foreign exchange markets, risk management, capital budgeting, and tax management for multinational enterprises. Recent trends in globalization include the emergence of integrated global financial markets, liberalization of markets, and innovations in financial services.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    14 views15 pages

    Finance Function in Global Scenario

    Uploaded by

    Preeti Agarwal
    International finance function involves the effective mobilization and utilization of foreign exchange funds in multinational enterprises. It includes concepts, techniques, and skills for managing funds consisting of foreign exchange. The scope of international finance includes foreign exchange markets, risk management, capital budgeting, and tax management for multinational enterprises. Recent trends in globalization include the emergence of integrated global financial markets, liberalization of markets, and innovations in financial services.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 15

    1

    Finance Function
    in
    Global Scenario

    1
    International Finance Function
     Definition
    International Financial Management is a process
    or a system of effective mobilisation and
    utilization of funds (FOREX) in MNEs in whom forex
    operations have significant influence on decision making.
    OR
    It is a system of acquisition and utilization of funds
    consisting of forex in MNEs in such a way that the
    objectives of the Enterprise are achieved.

    2
    Definition of IFM as a Subject
     It is that branch of knowledge which
    includes concepts, techniques and skills
    relating to effective financial management
    in multinational enterprises.

    3
    Characteristics of IFM
    1. Management of forex funds is core of function
    2. Raising of funds and utilization are major
    functions
    3. It relates to manage exchange-rate and interest-
    rate risks
    4. It is partly theoretical and partly analytical in
    nature
    5. It is futuristic in approach
    6. It is still an evolving subject

    4
    Scope of IFM
    1. International financial environment
    2. Foreign exchange markets, spot and forward
    3. Foreign exchange rate determination
    4. Foreign exchange risk management
    5. International capital budgeting
    6. Capital structure problems of MNEs
    7. Working capital management in MNEs
    8. Tax management in MNEs
    9. Global acquisition and mergers

    5
    Significance and Importance of
    IFM
    1. Helps to become a successful global MNE
    2. Helps in understanding complexities of global
    environment
    3. Helps in adjustment of impact of global financial
    events
    4. Allows to minimize the risks of foreign exchange
    transactions
    5. Helps to identify and exploit opportunities in
    foreign markets

    6
    What’s Special about
    “International” Finance?
     Foreign Exchange Risk
     Political Risk
     Market Imperfections
     Expanded Opportunity Set

    7
    What’s Special about
    “International” Finance?
     Foreign Exchange Risk
     The risk that foreign currency profits may
    evaporate in dollar terms due to unanticipated
    unfavorable exchange rate movements.
     Political Risk
     Sovereign governments have the right to regulate
    the movement of goods, capital, and people
    across their borders. These laws sometimes
    change in unexpected ways.

    8
    What’s Special about
    “International” Finance?
     Market Imperfections
     Legal restrictions on movement of

    goods, people, and money


     Transactions costs

     Shipping costs

     Tax arbitrage

    9
    What’s Special about
    “International” Finance?
     Expanded Opportunity Set
     It doesn’t make sense to play in only

    one corner of the sandbox.


     True for corporations as well as

    individual investors.

    10
    Goals for International Financial
    Management
     The focus of the subject is to equip with the
    “intellectual toolbox” of an effective global
    manager—but what goal should this effective
    global manager be working toward?
     Maximization of shareholder wealth?
    or
     Other Goals?

    11
    Maximization of Shareholders’
    Wealth
     Long accepted as a goal in the Anglo-Saxon
    countries, but complications arise.
     Who are and where are the

    shareholders?
     In what currency should we maximize

    their wealth?

    12
    Other Goals
     In other countries shareholders are viewed as
    merely one among many “stakeholders” of
    the firm including:
     Employees
     Suppliers
     Customers
     In Japan, managers have typically sought to
    maximize the value of the organization.

    13
    Other Goals
     No matter what the other goals, they cannot
    be achieved in the long term if the
    maximization of shareholders/ corporate
    wealth is not given due consideration along
    with environmental and social concerns.

    14
    Globalization of International
    Finance: Recent Trends
     Emergence of Globalized Financial Markets
     Liberalization and Integration
     Privatization / Deregulation of Markets
     Disintermediation/Emergence of Equity Cult
     Emergence of New Markets like Hong Kong etc.
     Functional Unification (Banks Providing all
    Functions)
     Innovations/Financial Engineering
     Automated Financial Services

    15

    You might also like