International Financial Management Case Study With Questions And Answers

International financial management case study with questions and answers in today’s world, global financial management is a well-known term, and it is also called international finance. It is money management in a global business atmosphere. It is entirely different because of the different currencies of different nations, varied political situations, defective markets, and diverse business opportunity sets. To go deep into the subject, you need to get through an international financial management case study with questions and solutions and have all your doubts cleared.

The scope of global financial management includes mainly three clusters:

• Concerning finance and business
• The increase in fund and the related administration
• Fundraising activities.

Objectives of international financial management:

In general, financial management is related to the procurement, allocation, and maintenance of monetary resources of a business. The primary goals are to ensure:

• A constant and satisfactory supply of finances to the company.
• Sufficient returns to the shareholders that depend upon the earning capacity, the market value of the share, and anticipations of the shareholders — optimum finance utilization. If you procure the fund, you need to utilize it in the maximum possible way at minimal cost.
• Security on investment, i.e., money needs to be invested in highly safe ventures so that a sufficient rate of return can be accomplished.
• Last but not least, to plan an excellent capital structure. There should be a good composition of capital so that a correct balance is maintained between equity capital and debt.

International financial management is different from domestic financial management mainly because of four significant facets such as the introduction of foreign money, market imperfections, political risks, and improved opportunity set. Here are the detailed descriptions:

Foreign exchange:

It is an added risk that a funding manager is required to provide under an IFM setting. This sort of risk refers to the risk of irregular prices of currency which has the probability of converting a lucrative deal into an unprofitable one.

Political risks:

The political dangers include all the changes in the economic situation of the country like the Contract act, taxation rules, etc. It is related to the government of a nation which can change the rules and regulations of the game at times in an unanticipated way.

Defects in the market:

After combining lots of things in the world’s economy, there have been numerous differences across the countries regarding fluctuating tax rates, transportation prices, etc. Defective markets force a funding manager to struggle for the most exceptional opportunities across the states.

Opportunity set:

If you do business differently in native countries, probably a company expands its odds of reaping fruits of many different tastes. With that, the opportunity for the company will be enhanced, and it will diversify the overall risk of the company.

Importance of international financial management:

Financial Management will help you understand the business practices and formulate the necessary systems and methods required in a healthy business. The primary objective of an international financial management case study with questions and answers is to understand the basic concepts of transparency and maximize the wealth of the shareholders. Not only is the objective restricted to shareholders but also it extends to all ‘stakeholders like workers, customers, suppliers, etc. You cannot achieve a single goal without accomplishing the happiness of the shareholders.

Explaining clearly, that maximizing the wealth of the shareholders would mean optimizing the value of the share. But before that, you need to be very clear about one thing, whether in which currency should the worth of the dividend be maximized? This is an indispensable decision that needs to be taken by the organization’s top management. But without the proper knowledge about international financial management, it will be tough to continue in the market because these global financial markets have a completely different shape and analytics when compared to the domestic markets. Excellent management of foreign funds can help an organization accomplish better efficiency in all markets. Undeniably, international trading is a vital factor in the prosperity and development of economies that take part in the exchange.

The increasing popularity and rate of globalization have amplified the significance of international finance. In a nutshell, after covering all the significant aspects of financial management with the help of an international business management case study with questions and answers, it is confident that you will gain an apparent understanding of how significant it is to invest and also the correct monetary approaches to do so. So why are you waiting for? Use what you learned from the international financial management case study thoroughly and take the necessary action!

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