跨国公司财务管理教材(PPT 31页).pptx

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1、Multinational Financial Management Alan Shapiro7th Edition J.Wiley&SonsPower Points byJoseph F.Greco,Ph.D.California State University,Fullerton1CHAPTER 19CURRENT ASSET MANAGEMENT AND SHORT-TERM FINANCING 2CHAPTER OVERVIEWI.INTERNATIONAL CASH MANAGEMENTII.ACCOUNTS RECEIVABLE MANAGEMENTIII.INVENTORY M

2、ANAGEMENTIV.SHORT-TERM FINANCING3I.INTERNATIONAL CASH MANAGEMENTI.INTERNATION CASH MANAGEMENTA.Seven Key Areas:1.Organization2.Collection/Fund Disbursement3.Interaffiliate Payments Netting4.Excess-Funds Investment5.Optimal Global Cash Balances6.Cash Planning/Budgeting7.Bank Relations4INTERNATIONAL C

3、ASH MANAGEMENTB.Goals of an International Cash Manager1.Quick/efficient cash control2.Optimal conservation/usage C.Organization:Centralize1.Advantages:a.Efficient liquidity levelsb.Enhanced profitabilityc.Quicker headquarter action5INTERNATIONAL CASH MANAGEMENT1.Advantages(con)d.Decision making enha

4、ncede.Better volume currency quotesf.Greater cash managementexpertiseg.Less political risk 6INTERNATIONAL CASH MANAGEMENTD.Collection/Disbursement of Funds1.Key Element:Accelerate collections2.Acceleration Methods:a.Cable remittancesb.Mobilization centersc.Lock boxesd.Electronic fund transfers7INTER

5、NATIONAL CASH MANAGEMENT3.Methods to Expedite Cash Paymentsa.Cable remittancesb.Establish accounts in clients bankc.Negotiate with banks-obtain value dating8INTERNATIONAL CASH MANAGEMENTE.Payments Netting1.Definition:offset payments of affiliate receivables/payables so that net amounts only are tran

6、sferred.2.Create Netting Centera.a subsidiary set up in a locationwith minimal exchange controls9INTERNATIONAL CASH MANAGEMENT2.Netting Centers(cont)b.Coordinate interaffiliate payment flowsc.Centers value is a direct functionof transfer volume.10INTERNATIONAL CASH MANAGEMENTF.Excess Funds Investmen

7、t1.Major task:a.determine minimum cashbalancesb.short-term investment ofexcess balances2.Requirements:a.Forecast of cash needsb.Knowledge of minimumcash position 11INTERNATIONAL CASH MANAGEMENT3.Investment Selection Criteria:a.Government regulationsb.Market structurec.Foreign tax lawsG.Optimal Globa

8、l Cash Balances1.Establish centrally managed cashpool2.Require affiliates to hold minimum12INTERNATIONAL CASH MANAGEMENT3.Benefits of Optimal Cash Balancesa.Less borrowing neededb.More excess fund investmentc.Reduced internal expensed.Reduced currency exposure 13INTERNATIONAL CASH MANAGEMENTH.Bank R

9、elations1.Good Relations Will Avoida.Lost interest incomeb.Overpriced servicesc.Redundant services14INTERNATIONAL CASH MANAGEMENT2.Common Bank Relations Problemsa.Too many banksb.High costssuch as compensating balancesc.Inadequate reportingd.Excessive clearing delays15II.ACCOUNTS RECEIVABLE MANAGEME

10、NTII.ACCOUNTS RECEIVABLE MANAGEMENTA.Trade Creditextended in anticipation of profit by1.expanded sales volume2.retaining existing customers16ACCOUNTS RECEIVABLE MANAGEMENTB.Credit Terms Should Consider1.Sales force2.Adjusting bonuses for cost of credit sales.17III.INVENTORY MANAGEMENTA.Problems:Seem

11、 to be more difficult due to1.Long,variable transits2.Lengthy customs procedures18INVENTORY MANAGEMENTB.Production Location/Inventory Control1.Overseas locationmay lead to higher inventory carrying costs due toa.larger amounts of work-in-processb.more finished goods19INVENTORY MANAGEMENTC.Advance In

12、ventory Purchases1.Usually where there are noforward hedges available2.Another hedging method:advance inventory purchases ofimported items,i.e.inventory stockpiling.20INVENTORY MANAGEMENTd.Reason for Stockpiling:greater risk of delaye.Solution to higher carrying costs:Adjust affiliates profit margin

13、sto reflect added costs.21IV.SHORT-TERM FINANCINGIV.SHORT-TERM FINANCINGA.Strategy1.Identify:key factors2.Formulate/evaluate:objectives3.Describe:available options4.Develop a methodology:to calculate/compare costs22SHORT-TERM FINANCINGB.Key Factors1.Deviations from Intl Fisher Effect?a.If yestrade-o

14、ff required betweencost and exchange riskb.If nocosts are same everywhere23SHORT-TERM FINANCING2.Exchange Riska.Offset foreign assets withforeign liabilitiesb.Borrow where no exposureincreases exchange risk3.Firms Risk Aversiondirect relation to price incurred to reduce exposure24SHORT-TERM FINANCIN

15、G4.Does Interest Rate Parity Hold?a.Yes.Currency is irrelevant.b.No.Cover costs may differ-added risk may mean theforward premium/discountdoes not offset interest ratedifferentials.25SHORT-TERM FINANCING5.Political Risk:If high,a.MNCs should 1.)maximize local financing.2.)Faced with confiscation or

16、currency controls,fewer assets at risk.26SHORT-TERM FINANCINGC.Short-Term Financing Objectives1.Four Possible Objectives:a.Minimize expected cost.b.Minimize risk without regardto cost.c.Trade off expected cost andsystematic risk.d.Trade off expect cost and total risk.27SHORT-TERM FINANCINGD.Short-Te

17、rm Financing Options1.Three Possibilitiesa.Inter-company loansb.Local currency loansc.Euro market28SHORT-TERM FINANCING2.Local Currency Financing:Bank Loansa.Short-term in naturerole of cleanup clauseb.Forms1.)Term loans2.)Line of credit3.)Overdrafts4.)Revolving Credit5.)Discounting29SHORT-TERM FINA

18、NCING3.Calculating Interest Costsa.Effective interest rate(EIR):most efficient measure of costb.Basic formula:EIR =Annual Interest Paid Funds Received30SHORT-TERM FINANCING4.Commercial Papera.Definition:short-term unsecured promissorynote generally sold by large MNCs on a discount basis.b.Standard maturitiesc.Bank fees charged for:1.)Backup line of credit2.)Credit rating service31