CH21 International Cash Management(国际金融管理,英文版)概要1.ppt

International Cash Management Chapter Objectives To explain the difference between a subsidiary perspective and a parent perspective in analyzing cash flows; To explain the various techniques used to optimize cash flows; To explain common complications in optimizing cash flows; and To explain the potential benefits and risks of foreign investments. Cash Flow Analysis:Subsidiary Perspective The management of working capital has a direct influence on the amount and timing of cash flow : inventory management accounts receivable management cash management liquidity management Cash Flow Analysis:Subsidiary Perspective Subsidiary Expenses International purchases of raw materials or supplies are more likely to be difficult to manage because of exchange rate fluctuations, quotas, etc. If the sales volume is highly volatile, larger cash balances may need to be maintained in order to cover unexpected inventory demands. Cash Flow Analysis:Subsidiary Perspective Subsidiary Revenue International sales are more likely to be volatile because of exchange rate fluctuations, business cycles, etc. Looser credit standards may increase sales (accounts receivable), though often at the expense of slower cash inflows. Cash Flow Analysis:Subsidiary Perspective Subsidiary Dividend Payments Forecasting cash flows will be easier if the dividend payments and fees (royalties and overhead charges) to be sent to the parent are known in advance and denominated in the subsidiary’s currency. Cash Flow Analysis:Subsidiary Perspective Subsidiary Liquidity Management After accounting for all cash outflows and inflows, the subsidiary must either invest its excess cash or borrow to cover its cash deficiencies. If the subsidiary has access to lines of credit and overdraft facilities, it may maintain adequate liquidity without substantial cash balances. Centralized Cash Management While each subsidiary is managing its own working capital, a centralized cash management group is needed to monitor, and