Financial treasury management

1. SR UNIVERSITY
ASSIGNMENT
Topic : International Financial managemen
t
Submitted by :
N.Karthik
IMBA 4th yr
( 18k41m0132 )

2. International financial management, also known a
s international finance, is the management of fin
ance in an international business environment; th
at is, trading and making money through the exc
hange of foreign currency.
INTERNATIONAL FINANCIAL MANAGEMENT

3. SCOPE OF IFM:-
• Investment decisions:- Investments refers to utilizin
g and allocating your funds in assets or other projects
or production whichever may be , but it should be benefi
cial and should be kept as an asset . Investment decisio
ns taken by investor is backed by his decision ability .

4. Financial decisions:- One of the crucial scope of th
e financing manager involves making finance decision
s . The finance manager has to decide from where to r
aise funds . He can either raise funds from company’s
own Money like equity, Retained earnings or may lend
from debentures , bank loan , bond etc.,. The main ob
jective of the finance decision is to have optimum capi
tal structure .

5. Dividend decisions:- The finance manager has to deci
de about the profits of the company , he has to choose bet
ween either to share the profits to the shareholders or to re
tain it for the company for future use . The dividend is an p
ortion of profits which is to be paid to shareholders as per
share purchased by them. The finance manager has to deci
de according to the position of the concern and shareholde
r’s interest as both of them are of high importance

6. Features of IFM : Some of the features of international finan
cing management are listed below as international finance man
agement has some certain distinguished features when compar
ed with domestic finance managing they are,
• Foreign exchange risks:- An understanding of foreign exchang
e is very important for the investors and managers in today’s wo
rld of unforeseen changes in exchange rates. This rates is ge
nerally ignored and is lesser in domestic economies as it extends to
only that particular economy , but when it comes to global level it sh
ould be very seriously taken as there is risk of violation foreign exch
ange rates

7. Political risks : ne of the major risk which an company
may encounter in international finance is political risk. It m
ay result in loss. As new acts and laws may be enforced o
r may change decisions taken by prior person.
E.g.:- In 1992 ,Eron development corporation signed a co
ntract to build India’s longest power plant , but it was
later cancelled in 1995 by politicians in Maharashtra ,
who argued that India does not need power plant . Th
e company spent nearly $300million on that project.
• Market imperfections:- Market imperfections is in tr
end nowadays, and this is one of major demerit for th
e concern .

8. OBJECTIVES OF FINANCIAL MANAGEMENT
The objective provide a framework for optimum financial de
cision making. They are concerned with designing a metho
d of operating the internal investment and financing of a fir
m. there are two widely discussed approaches under this, t
hese are:
+Profit Maximisation
+Wealth Maximisation

9. 1. Profit Maximization: The objective of financial mana
gement is to earn maximum profits. Various important de
cisions are taken to maximize the profit of the firm. Profi
t maximization as an objective of financial management
results in efficient allocation of resources. Companies c
ollect their finance by issuing shares to the public.
2. Wealth Maximization: The objective of wealth maximi
zation of shareholders considers all future cash flows, di
vidends, earning per share, risk of a decision, etc.

10. Method of Conducting International Bus
iness
Exporting and Importing. Exporting denote
s selling of goods and services from the ho
me country to a foreign country. ...
Contract Manufacturing (or) Outsourcing. .
..
Licensing and Franchising. ...
Joint Venture. ...
Foreign Direct Investment (FDI)

11. Factors affecting IMF
The factors include individual and busi
ness transactions, trade and investmen
t activities, trade deficits or surpluses, i
nflation, and interest rates.

12. Problems of Financial Management i
n Public Sector Undertakings
.Lack of proper planning: ...
.Unfavorable input-output ratio: ...
.Cost of capital: ...
.Problem of pricing: ...
.Problem of surpluses: ...
.Problem of raising loans: ...
.Problem of budgeting: ...
.Problem of delegation of authority:

13. What are the Goals of International Financial Management?
.Wealth Maximization of Shareholders. ...
.Profit Maximization. ...
.Optimum Rate of Interest. ...
.Foreign Exchange Risk Management. ...
.Political Risk Management. ...
.Effectively Use Expanded Sets of ..........Opportunities. ...
. Proper Tax Planning. ...
. Effective Inflation Risk Management.

14. Components of International Financial Environment
.Foreign Exchange Market. ...
.Currency Convertibility. ...
.International Monetary System. ...
.International Financial Markets. ...
.Balance of Payments.

15. Recent Developments in Global Financial Markets are
:
.Money Markets:
.Short-term Interest Rates:
.Government Bond Yields:
.Foreign Exchange Markets:
.Equity Markets:
.Derivative Markets :
.Exchange-traded Derivatives: