Gyan ganga

Institute of technology &sciences

Assignment on

International financial management

Submitted to submitted by
Mr.Vinamra nayak ROSHNI RAI
MBA/09-11/134

Date of assignment Date of submission

30-12-2010 05-10-2011

INTRODUCTION
 The importance of Multinational Corporation and
globalization of production are now well recognized .There is no
doubt that in many ways the world economy is becoming a single
huge and complex organization. No nation today cans effort to
think itself as an economic entity into itself.

DEFINATION

“International financial management is a branch of

economics that studies the dynamics of exchange rate foreign
investment and how these affect international tread.”

INTERNATIONAL FINANCING

International finance is an integral part of total

management and cuts across functional boundaries because its
express inputs outputs and overall result in monetary fund.
International financing include all activity on
which management must make financial decision, taking into
account simultaneously-

1. The conditions prevailing in tow or more financial markets.

2. Regulatory and institutional barriers to the international
movement of fund.
3. The change in the exchange rate of national monies.

INTERNATINTERNATIONAL FINANCIAL ENVIROMENT

International financial environment can be

classified into economic financial ,political ,and social areas.
Besides the legal framework vary from country t country. Global
player have to face a dynamic environment of free market forces
and fierce competition of cross border companies.
 1. ECONOMIC AND FINANCIAL FACTER:-
Recession,
Depresion or boom condition in other treding partners growth rates
of GDP,money supply growth rate currency fluctuation are the
factor which affect the international project.
EXAMPLE
Like recession in developed countries like U.S.A.
affect the export many and production of some of export dependent
industries and growth of international trade.

2. POLITICAL FACTOR:-
Stability in economic policy
depand on the political system and its stability Lows relating to
ownership, foreign trade and foreign investment are all factors
which affect influence global business project.
Government policies, including policies on
industry, fiscal policies, trade tariff policies and monetry policies
have profound influence on global business.

3. LEGAL FECTOR:-
The legal system and the operation of
lows and dependability of court and their efficiency namely,
executive, legislature and judiciary are also a part of the
environment for global operations.

4. SOCIAL AND CULTURAL FACTOR:-

The social
habits and customs of the consuming public their tastes and
preferences are some of the factor influencing global operation.
Some cultural factors like traditions and customs play a role in
global operations.
 Belief is regarding colour is an
example, Black is used by Muslim women for burkha while it is a
symbol of mourning for the Hindu culture.

White is for death and mourning in

China and Korea but in the West as wedding grown are made of
white colour.

5. TECHNOLOGICAL ENVIROMENT:-
The technological
environment is adjustable and changeable to suit to the market
and demand condition. The fast changes in technologies leads
to high cost of transition from one stage to another. Machinery
becomes outmoded fast.

6. ECOLOGICAL ENVIROMENT:-
Natural environment
encompasses natural resource endowments weather, climatic
conditions, ecological factor, infrastructural factor like power
water resources, Air ways etc. These factors influence also the
location of certain industries and unit.

7. DEMOGRAPHIC FACTOR:-
The demographic factors
which influence the operation of MNC are varied from country to
country. Some of these are the size of country, population and its
growth rate, age composition etc. All these factors influence the
business decisions and domestic companies are also affected by
these factors.

RISK IN INTERNATIONAL PROJECT

 One of the initial point to
consider is the country risk that the MNC firm faces. It is in the
form of political risks of confiscation of investments.
The risk which affect the international
project mainly has classified in to:-

1 .EXCHANGE RISK AND CAPITAL MARKET

SEGMENTATION:- cash flow from the foreign project are in a
foreign currency and therefore subject to exchange risk from the
parents point of view.

2. POLITICAL OR COUNTRY RISK:- assets

located abroad are subject to risk of appropriation or
nationalization by the host country government. Also
there may be changes in applicable withholding
taxes restrictions on remittances by the subsidiary to
the parent etc.

3. INTERNATIOMAL TAXATION: - in addition

to the taxes the subsidiary pays to the host
government there will be generally be withholding
taxes on dividends and other income remitted to the
parent.

4. BLOCKED FUND;- sometimes a foreign

project can become an attractive propel because the
parent has some funds accumulated in a foreign
country which cannot be taken out (or can be taken
out only with heavy penalties in the form of taxes).
BIBLIOGRAPHY:-
BOOKS NAME WRITER’SNAME
International financial management P.G.APTE
International financial management V.K.Bhalla
International financial management V.A.Avadhani

THANKYOU