The document discusses international financial management. It covers topics such as the balance of payments, foreign exchange markets, sources of financing for foreign investment, and factors that influence international trade flows. International financial management involves managing financial resources and exposure across different countries and currencies. A key part is the balance of payments, which records a country's international transactions and provides insights into the demand and supply of its currency.

1. Presented by
REDDY JANAIAH,
MBA,NCFM,M.Com

3.  It is a provision of money
 It is a acquisition of funds
 It is a source to run any organization

4.  It is mainly concerned with how to optimally
make various corporate financial decisions,
such as those pertaining to investment,
financing, dividend policy, and working
capital management, with a view to
achieving a set of given corporate objectives

5.  Finance which facilitates the smooth conduct
of all these different types of activities, has
also assumed an international finance

6.  Foreign exchange risk
 Political risk
 Market imperfections
 Expanded opportunity set

7.  The management of financial resources in
the context of international business
transactions is referred to as International
Financial Management

8.  Shareholder`s wealth maximization
a. Stakeholders consideration
b.mangement consideration
c.societal consideration
 Profit maximization

9.  Foreign exchange market
 Exchange rate
 Exchange rate exposure
 International monetary system
 Investment decision
 International financial market
 Assessment and management of interest rate
exposure
 MNC`s working capital management
 International accounting and taxation strategy
 Balance of payments
 International indebtedness and its management

10. Foreign
exchange
markets
Sourcing
capital in
global
markets
Managing
forex
exposure
Foreign
investment
decisions
IFM

11.  Licensing
 Franchising
 Joint ventures
 Establishing new foreign subsidiaries
 Manage contracts

12.  Foreign direct Investment
a. Financial collaborations
b. joint ventures and Technical
collaborations
c. capital markets
d. private placements or preferential rights
 Foreign portfolio investments

13.  The absolute advantage theory
 The comparative cost theory
 Opportunity cost theory
 The vent for surplus theory

14.  Trade in agricultural and manufactured goods
 Trade between partners of regional trade
agreements(RTAs)
 Developing countries Trade
 South-south trade
 Containerized cargo
 Air cargo, express cargo
 Global production network
 Intra-firm trade
 E-commerce
 Gross border financial flows
 Global financial market

15.  Inter relationships between relevant
environmental variables and corporate
responses
 Adopt finance function to firm's own
strategic nature
 To take in stride past failures and mistakes
 To design specific solution
 Knowledge of macro environment
 Culture
 Investment decision
 Working capital management

17.  Which is a stastical record of a country`s
with rest of the world, is worth studying for
a few reasons.
 It provides detailed information concerning
the demand and supply of a country`s
currency
 E. g., U.S imports more than its exports,
then the supply of dollar is likely to exceed
the demand in the foreign exchange market.
One can thus infer that the US dollar would
be under pressure to depreciate agonist
other currencies

18.  The BOP can be formally defined as the
stastical record of a country`s international
transactions over a certain period of time
presented in the form of double entry book
keeping

19.  Cost of production
 Demand and supply
 Cost and availability
 Exchange rate movements
 Domestic business
 Trade agreements
 External pressures
 Price of good

20.  Phase I (up to 1975-76)- a period of
deterioration
 Phase II ( 1976-77 to 1979-80)- a period of
transition and improvement
 Phase III (1980-81 to 1989 -90)- a period of
structural imbalances
 Phase IV (1990-91 and onwards)- Reformatory
period

21.  Any transaction that results in a receipt
from foreigners will be recorded as a credit,
with a positive sign (+)
 Any transaction that results in a payment to
foreigners will be recorded as a debit, with a
negative sign (-)

22.  Since the balance of payments records all
types of international transactions a country
consummates over a certain period of time,
it maintains a wide variety of accounts
1.capital account
2.capital account
3.offical reserve account

23.  It includes exports and imports of goods and services
a. Merchandise trade- represents exports and imports
of tangible goods.
e.g., oil, wheat, clothes, automobiles and computers
b. trade in services- includes payments and receipts
for legal , engineering consulting, and other preformed
services and tourist expenditures
c. factor income- consists of payments and receipts of
interest, dividends, and other income on previously
made foreign investments.
d. unilateral transfer-involves unrequited payments
such as gifts foreign aid, and reparations

24.  It includes all purchases and sales of assets
such as stocks, bonds, bank accounts, real
estate, and business.
a. direct investment – involves acquisitions
of controlling interests in foreign business
b. portfolio investment- investments in
foreign stocks and bonds that do not involve
acquisitions of control
c. other investment- it includes bank
deposits, currency investment, trade credit,
and the like

25.  Covers all purchases and sales of international
reserve assets such as
a. dollars
b. foreign exchanges
c. gold
d. special drawing rights(SDRs)

26.  Representing omitted and miss recorded
transactions. Recordings of payments and receipts
arising from international transactions are done
different times and places, possibly using different.

27.  Cumulative balance of payments including the
current account, capital account, and the stastical
discrepancies

28.  International money, which is widely acceptable as
means of payment of international transactions,
comprises hard currencies (e.g., U.S dollar, U.K
POUND, Euro and German Mark) which are
convertible into any currency in the world.
 An importing country has to pay the exporting
country in the latter`s currency, which can be
obtained through hard currencies only.

29.  Trade flows
 Flow of services
 Unilateral transfer
 Direct investment abroad
 Portfolio investment abroad
 Short-term capital flows

30.  Impact of inflation
 Impact of national income
 Impact of government policies
a. Subsidies for exporters
b. restrictions on imports
c. lack of restriction on piracy
 Impact of exchange rates