ch18FINANCINGFOREIGNTRADE(跨国公司财务管理-Josep.pptxVIP

Multinational Financial Management Alan Shapiro7th Edition J.Wiley SonsPower Points byJoseph F. Greco, Ph.D.California State University, Fullerton CHAPTER 18FINANCING FOREIGN TRADECHAPTER OVERVIEW:I. PAYMENT TERMSII. DOCUMENTSIII. FINANCING TECHNIQUESIV. GOVERNMENT SOURCES OF EXPORT FINANCING AND CREDIT INSURANCEV. COUNTERTRADEI. PAYMENT TERMSI. PAYMENT TERMS A. Five Principal Means: 1. Cash in advance 2. Letter of Credit 3. Drafts 4. Consignment 5. Open AccountPAYMENT TERMS B. Cash in Advance 1. Minimal risk to exporter 2. Used where there is a. Political unrest b. Goods made to order c. New unfamiliar customerPAYMENT TERMS C. Letter of Credit (L/C) 1. A letter addressed to seller a. written and signed by buyer’s bank b. promising to honor seller’s drafts. c. Bank substitutes its own commitment d. Seller must conform to termsPAYMENT TERMS 2. Advantages of an L/C to Exporter a. eliminates credit risk b. reduces default risk c. payment certainty d. prepayment risk protection e. financing sourcePAYMENT TERMS 3. Advantages of L/C to Importer a. shipment assured b. documents inspected c. may allow better sales terms d. relatively low-cost financing e. easy cash recovery if discrepancies PAYMENT TERMS 4. Types of L/Cs a. documentary b. non-documentary c. revocable d. irrevocable e. confirmed f. transferablePAYMENT TERMSD. DRAFTS 1. Definition: - unconditional order in writing - exporter’s order for importer to pay - at once (sight draft) or - in future (time draft)PAYMENT TERMS 2. Three Functions of Drafts a. clear evidence of financial obliga- tion b. reduced financing costs c. provides negotiable and uncondi- tional financial instrument (ie. May be converted to a banker’s acceptance)PAYMENT TERMS 3. Types of Drafts a. sight b. time c. clean (no documents needed) d. documentaryPAYMENT TERMSE. CONSIGNMENT 1. Exporter = the consignor 2. Importer = the consignee 3. Consignee attempts to sell goods to a third party; keeps some profit,