International Cash Management

Slides:

Advertisements

Similar presentations

Multinational Capital Budgeting 14 Chapter South-Western/Thomson Learning © 2006 Slides by Yee-Tien (Ted) Fu.

Advertisements

Long-Term Financing 18 Chapter South-Western/Thomson Learning © 2003.

International Arbitrage and Interest Rate Parity

9 - 1 International Finance Lecture Review Interest Rate Parity Transaction Costs Political Risk Differential Tax Laws.

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

International Financial Management

C H A P T E R 18 Long-Term Financing.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

Risk Management Strategy Joy McAlister November 4, 2003.

Slide 1 of 32 Slides developed by Jeff Madura, with additions and enhancements by Tim Richardson.

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

International Cash Management 21 Chapter South-Western/Thomson Learning © 2003.

Long-Term Financing 18 Chapter South-Western/Thomson Learning © 2003.

The Multinational Corporation and Globalization

CASH MANAGEMENT IN MNC NEHA ABHISHEK, BANGALORE Batch: 22, (5 th July to 30 th August, 2014)

Working Capital Management for the Multinational Corporation

Multinational Capital Budgeting 14 Chapter South-Western/Thomson Learning © 2003.

Managing Transaction Exposure 11 Chapter South-Western/Thomson Learning © 2003.

20 Lecture Country Risk Analysis.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved INTERNATIONAL FINANCIAL MANAGEMENT EUN / RESNICK Fourth Edition Chapter Objective:

Managing Transaction Exposure

International Cash Management 21 Chapter South-Western/Thomson Learning © 2006 Slides by Yee-Tien (Ted) Fu.

Managing Economic Exposure and Translation Exposure

Managing Transaction Exposure 11 Chapter South-Western/Thomson Learning © 2006.

22 Lecture Long-Term Financing.

Multinational Cost of Capital & Capital Structure 17 Chapter South-Western/Thomson Learning © 2003.

Short-Term Financing 20 Chapter South-Western/Thomson Learning © 2003.

© 2011, 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

Multinational Capital Budgeting 7 7 Chapter. Chapter Objectives To compare the capital budgeting analysis of an MNC’s subsidiary with that of its parent;

International Cash Management 28 Lecture Chapter Objectives To explain the difference in analyzing cash flows from a subsidiary perspective versus.

Multinational Capital Budgeting

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

Country Risk Analysis 16 Chapter South-Western/Thomson Learning © 2003.

Analyzing Country Risk 19 Chapter South-Western/Thomson Learning © 2006 Slides by Yee-Tien (Ted) Fu.

To explain the techniques used to measure country

Managing Transaction Exposure

INTRODUCTION A process of implementing and managing financial control systems, collecting financial data, analyzing financial reports, and making sound.

Short-Term Financing 23 Lectu re Chapter Objectives To explain why MNCs consider foreign financing; To explain how MNCs determine whether to use.

Short-Term Financing 24 Lectu re Chapter Objectives To explain why MNCs consider foreign financing; To explain how MNCs determine whether to use.

© 2011, 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

Multinational Cost of Capital & Capital Structure.

Long-Term Financing 21 Lecture Chapter Objectives To explain why MNCs consider long-term financing in foreign currencies; To explain how the feasibility.

19 Lecture Country Risk Analysis.

Short-Term Financing 20 Chapter South-Western/Thomson Learning © 2003.

International Cash Management 21 Chapter South-Western/Thomson Learning © 2003.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

Lecture 12. Lecture Review Capital Budgeting Subsidiary versus Parent Perspective Remitting Subsidiary Earnings to the Parent Input for Multinational.

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

C H A P T E R 20 Short-Term Financing. Chapter Overview A. Sources of Short-Term Financing B. Internal Financing by MNCs C. Why MNCs Consider Foreign.

Chapter 11 Managing Transaction Exposure

Measuring Exposure to Exchange Rate Fluctuations

Managing Transaction Exposure

International Business 9e

Country Risk Analysis.

16 Chapter Country Risk Analysis South-Western/Thomson Learning © 2003.

Managing Transaction Exposure

Multinational Cost of Capital & Capital Structure

Measuring Exposure To Exchange Rate Fluctuations

18 Chapter Long-Term Financing South-Western/Thomson Learning © 2003.

Managing Transaction Exposure

Managing Transaction Exposure

Multinational Capital Budgeting

Capital Budgeting in Foreign Subsidiaries

Multinational Capital Budgeting

International Cash Management

18 Chapter Long-Term Financing South-Western/Thomson Learning © 2003.

12 Multinational Capital Structure & Long Term Financing

Presentation transcript:

International Cash Management C H A P T E R 21 International Cash Management

Chapter Overview A. Cash Flow Analysis: Subsidiary Perspective B. Centralized Cash Management C. Techniques to Optimize Cash Flows D. Complications in Optimizing Cash Flows E. Investing Excess Cash

Chapter 21 Objectives This chapter will: A. Explain the difference in analyzing cash flows from a subsidiary perspective and from a parent perspective B. Explain the various techniques used to optimize cash flows C. Explain common complications in optimizing cash flows D. Explain the potential benefits and risks from foreign investing

A. Cash Flow Analysis: Subsidiary Perspective 1. Subsidiary Expenses 2. Subsidiary Revenue 3. Subsidiary Dividend Payments 4. Subsidiary Liquidity Management

B. Centralized Cash Management 1. MNCs commonly use centralized cash management to monitor and manage the parent-subsidiary and intersubsidiary cash flows. 2. This role is critical since it can often benefit individual subsidiaries in need of funds or overly exposed to exchange rate risk.

Cash Flow of the Overall MNC 21.1

C. Techniques to Optimize Cash Flows 1. Accelerating Cash Inflows 2. Minimizing Currency Conversion Costs 3. Managing Blocked Funds 4. Managing Intersubsidiary Cash Transfers

D. Complications in Optimizing Cash Flows 1. Company-Related Characteristics 2. Government Restrictions 3. Characteristics of Banking Systems

E. Investing Excess Cash 1. How to Invest Excess Cash

Short-Term Annualized Interest Rates Among Countries (as of February 2004) 21.4

E. Investing Excess Cash 2. Centralized Cash Management a. Centralization When Subsidiaries Use the Same Currency b. Centralized Cash Management of Multiple Currencies c. Impact of Technology on Centralized Cash Management

E. Investing Excess Cash 3. Determining the Effective Yield 4. Implications of Interest Rate Parity

E. Investing Excess Cash 5. Use of the Forward Rate as a Forecast a. Relationship with the International Fisher Effect b. Conclusion about the Forward Rate

E. Investing Excess Cash 6. Use of Exchange Rate Forecasts a. Use of Probability Distributions 7. Diversifying Cash across Currencies 8. Dynamic Hedging