CH21InternationalCashManagement(国际金融管理,英 .pptxVIP

;Chapter Objectives;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.;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.;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.;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;Cash Flow of the Overall MNC;Centralized Cash Management;;Minimizing Currency Conversion Costs Netting reduces administrative and transaction costs through the accounting of all transactions that occur over a period to determine one net payment. A bilateral netting system involves transactions between two units, while a multilateral netting system usually involves more complex interchanges.;Intersubsidiary Payments Matrix;Managing Blocked Funds A government may require that funds remain within the country in order to create jobs and reduce unemployment. The MNC should then reinvest the excess funds in the host country, adjust the transfer pricing policy (such that higher fees have to be paid to the parent), borrow locally rather than from the parent, etc.;Managing Intersubsidiary Cash Transfers A su