international financialmanagement 9国际财务管理

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1、1Chapter9InternationalCashManagement2ObjectivesThischapteremphasizesthedecisionsinvolvedinmanagementofcashbyanMNC.TheadditionalopportunitiesandrisksofcashmanagementforanMNCversusadomesticfirmshouldbestressed.Thespecificobjectivesare:3Objectivestoexplainthedifferencebetweenasubsidiaryperspect

2、iveandaparentperspectiveinanalyzingcashflows;toexplainthevarioustechniquesusedtooptimizecashflows;toexplaincommoncomplicationsinoptimizingcashflows;andtoexplainthepotentialbenefitsandrisksofforeigninvestments.4CashFlowAnalysis:SubsidiaryPerspectiveThemanagementofworkingcapitalhasadirectinfl

3、uenceontheamountandtimingofcashflow:inventorymanagementaccountsreceivablemanagementcashmanagement5CashFlowAnalysis:SubsidiaryPerspectiveSubsidiaryExpensesInternationalpurchasesofrawmaterialsorsuppliesaremorelikelytobedifficulttomanagebecauseofexchangeratefluctuations,quotas,etc.alargerinven

4、toryisthusrequiredbyMNCcomparedwithdomesticfirms.Ifthesalesvolumeishighlyvolatile,largercashbalancesmayneedtobemaintainedinordertocoverunexpecteddemands.6CashFlowAnalysis:SubsidiaryPerspectiveSubsidiaryRevenueInternationalsalesaremorelikelytobevolatilebecauseofexchangeratefluctuations,busin

5、esscycles,etc.Loosercreditstandardsmayincreasesales(accountsreceivable),thoughoftenattheexpenseofslowercashinflows.7CashFlowAnalysis:SubsidiaryPerspectiveSubsidiaryDividendPaymentsForecastingcashflowswillbeeasierifthedividendpaymentsandfees(royaltiesandoverheadcharges)tobesenttotheparentare

6、knowninadvanceanddenominatedinthesubsidiary’scurrency.8CashFlowAnalysis:SubsidiaryPerspectiveSubsidiaryLiquidityManagementAfteraccountingforallcashoutflowsandinflows,thesubsidiarymusteitherinvestitsexcesscashorborrowtocoveritscashdeficiencies.Ifthesubsidiaryhasaccesstolinesofcreditandoverdr

7、aftfacilities,itmaymaintainadequateliquiditywithoutsubstantialcashbalances.9CentralizedCashManagementWhileeachsubsidiaryismanagingitsownworkingcapital,acentralizedcashmanagementgroupisneededtomonitor,andpossiblymanage,theparent-subsidiaryandintersu