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Ifm intro Ifm intro Presentation Transcript

  • www.StudsPlanet.com
  • www.StudsPlanet.com 1.Varied economic systems. 2.Tariff and non-tariff barriers. 3.Political risks. 4.Environmental safeguards. 5.Dumping. 6.Cultural differnces.
  • 7.Languages differences 8.Intellectual property rights. 9.Cyber crimes. 10.Transfer pricing. 11.International taxation. 12.Economic and currency crisis. 13.Interest Rates. www.StudsPlanet.com
  • 14.Foreign exchange Risk. 15.Cold War. 16.International Business cycle. 17.Operational Risks. 18.Global Terrorism. 19.International cash management. 20.Credit worthiness. 21.Methods of payment. 22.Foreign exchange markets. www.StudsPlanet.com
  • DOMESTIC FINANCE INTERNATIONAL FINANCE  It is not exposed to foreign exchange risk and political risks .  It is subject to market imperfections of one country.  International finance is related to cross border transactions and exposed to foreign exchange and political risks.  It is very much subject to market imperfections because MNC ‘s should operate in different economies. www.StudsPlanet.com
  • DOMESTIC FINANCE INTERNATIONAL FINANCE  The availability of portfolio for investment is limited.  It has no scope for access to global markets.  It is limited in scope.  The availability of portfolios for investment is wide and large across the nations in the world.  The MNC’s venture into the arena of global markets and thereby benefit from an expanded business.  It has wider scope. www.StudsPlanet.com
  •  Money acts as a medium of exchange both in domestic and international markets as well.  FE market is a market for converting the currency of one country in to that of another.  Without FE market, the international trade and investment on the scale that we see today would be impossible and countries would have to resort for barter. www.StudsPlanet.com
  • 1. Exchange rate risk and its management 2. Foreign exchange market 3. Exchange rate determination and forecasting 4. MNC`s investment decision 5. International working capital management 6. International accounting and taxation 7. International financing decision 8. Macro economic analysis- b/p & external debt www.StudsPlanet.com
  •  Domestic FM is concerned with raising and utilizing of funds for projects with positive NPV. The company wants to minimize the cost of capital and maximize the ROI  MNC operates in different economic, political, cultural, and tax environments.  They operate in various product factor markets  They trade in large number of currencies other than home currency- assets-liabilities-receivables and payables in different currencies.  They have easy access to domestic and international capital markets and access to different markets and instruments  They are exposed to foreign exchange and political risks in addition to interest rate and credit risks.  Investments can be made in different markets, instruments etc. and has wider choices.  So financial decisions are more complex than a purely domestic company. www.StudsPlanet.com
  • www.StudsPlanet.com IFM Internatio nal financial markets Internationa l financial systems Foreign Exchange market Currency convertibility BOP
  • DOMESTIC FINANCIAL MGT INTERNATIONAL FINANCIAL MGT  Single currency  Financial instruments use is limited.  Unique economic and legal systems.  Single language or few  Multiple  Large number of futures,interest rates,swaps etc  Different economic and legal systems.  Language differences are the core of the difficulties. www.StudsPlanet.com
  • DOMESTIC FINANCIAL MGT INTERNATIONAL FINANCIAL MGT  Limited cultures and subcultures.  Country specific accounting standards and GAAP principles.  Risks are related to domestic country.  Multicultural ,different values, ethics and code of conduct.  Different accounting standards and GAAP principles in different countries .  Multiple risks such as interest rate risks,currency risk,political risks etc. www.StudsPlanet.com
  • www.StudsPlanet.com
  • www.StudsPlanet.com 1.Transfer funds from one nation currency to another. 2.Transfer of purchasing power is necessary. 3.Import of food items,petroleum products,technology,life saving drugs from foreign countries. 4.For availing services like education,tourism,healthcare,insurance,banking,hospit ality,telecommunication,entertainment.