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    International Financial Management

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    Parvesh Aghi
    IFM involves managing finances in an international business environment through foreign exchange. It allows organizations to connect with overseas partners through international dealings. The main goal of IFM is to maximize shareholder wealth. It must deal with foreign exchange risk, political risk, and imperfect markets. However, it also provides expanded opportunities by allowing firms to locate production and raise funds globally. The document outlines the key topics that fall under IFM such as international capital budgeting, sources of finance, foreign exchange management, and working capital management.

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    International Financial Management

    Uploaded by

    Parvesh Aghi
    49 views13 pages
    IFM involves managing finances in an international business environment through foreign exchange. It allows organizations to connect with overseas partners through international dealings. The main goal of IFM is to maximize shareholder wealth. It must deal with foreign exchange risk, political risk, and imperfect markets. However, it also provides expanded opportunities by allowing firms to locate production and raise funds globally. The document outlines the key topics that fall under IFM such as international capital budgeting, sources of finance, foreign exchange management, and working capital management.

    Original Title

    INTERNATIONAL FINANCIAL MANAGEMENT

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    IFM involves managing finances in an international business environment through foreign exchange. It allows organizations to connect with overseas partners through international dealings. The main goal of IFM is to maximize shareholder wealth. It must deal with foreign exchange risk, political risk, and imperfect markets. However, it also provides expanded opportunities by allowing firms to locate production and raise funds globally. The document outlines the key topics that fall under IFM such as international capital budgeting, sources of finance, foreign exchange management, and working capital management.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    49 views13 pages

    International Financial Management

    Uploaded by

    Parvesh Aghi
    IFM involves managing finances in an international business environment through foreign exchange. It allows organizations to connect with overseas partners through international dealings. The main goal of IFM is to maximize shareholder wealth. It must deal with foreign exchange risk, political risk, and imperfect markets. However, it also provides expanded opportunities by allowing firms to locate production and raise funds globally. The document outlines the key topics that fall under IFM such as international capital budgeting, sources of finance, foreign exchange management, and working capital management.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 13

    INTERNATIONAL

    FINANCIAL
    MANAGEMENT
    PARVESH AGHI
    The essence of international financial management

    IFM is a popular concept


    which means management of
    finance in an international
    business environment, it
    implies, doing of trade and
    making money through the
    exchange of foreign currency.
    2
    The international financial
    activities help the
    organizations to connect with
    international dealings with
    overseas business partners-
    customers, suppliers, lenders.

    3
    The main objective of international financial
    management is to maximise shareholder wealth.

    Adam Smith wrote in his famous title, “Wealth of


    Nations” that if a foreign country can supply us with a
    commodity Cheaper than we ourselves can make it,
    better buy it of them with some part of the produce of
    our own in which we have some advantage.

    4
    Contents of IFM
    Foreign Sourcing
    Exchange Capital in
    Markets Global Markets

    International
    Financial Synthesis
    Management

    Managing Foreign
    FOREX Investment
    Exposure Decisions
    Key Issues of International Financial Management

    Foreign
    Political risk
    exchange risk

    Expanded
    Market
    opportunity
    imperfections
    sets
    6
    Foreign exchange risk
    In a domestic economy this risk is generally ignored
    because a single national currency serves as the
    main medium of exchange within a country.
    However, when different national currencies are
    exchanged, there is definite risk of volatility in
    foreign exchange rates.
    Variability of exchange rates is widely regarded as
    the most serious international financial problem
    facing policymakers and corporate managers.

    7
    Foreign exchange risk

    IFM deals with exchange risk.


    Appreciation or devaluation of
    a currency may have an
    adverse effect on a company’s
    product pricing, input cost and
    financial state of affairs.

    8
    Political risk

    It is risk of loss (or gain) from


    unforeseen government action or
    other events of political character,
    such as acts of terrorism.
    An unexpected overturn of the
    government may jeopardize
    existing negotiated contract.

    9
    Market imperfections

    The world markets are highly


    imperfect, in the sense that a variety
    of barriers still hamper free
    movements of people, goods, services,
    and capital across national boundaries.
    Trade barriers and tax incentives may
    affect location of production.

    10
    Expanded opportunity sets
    When firms go global, they get benefited
    from the expanded opportunities available
    globally. They can locate production in any
    country or region to maximize their
    performance and raise funds in any capital
    market where the cost of capital is the
    lowest. They can also gain from greater
    economies of scale when tangible
    and intangible assets are deployed on a
    global basis..

    11
    TOPICS TO COVERED IMF
    International International International
    Capital Sources of Working Capital
    Budgeting Finance Management

    Foreign
    Exchange
    Management

    12
    Thank you

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