A Study of Multinational Working Capital Management

Author

Ali Lo, Fontbonne College

Year of Award

1991

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business

Department

Business Administration

Keywords

currancy, interest, loan, dollar

Abstract

Problems of multinational financial management have become increasingly important to the business community during the last decade. According to U.S. Department of Commerce, the United States' direct investment between 1957 and 1966 had jumped from $25.3 billion to $54.6 billion. At the same time, export of merchandise increased with an annual growth rate of 6%. This rapid transition on exports to overseas operations to serve foreign market brought an important attention to financial executives to have knowledge about foreign capital markets, accounting taxes, and foreign exchange risk exposure.

Throughout the book, emphasis is on multinational financial management as its basic principles to take advantages of being multinational. It was previously noticed that domestic companies often focus on the threats and risks instead of focusing on the opportunities that are available to multinational firms. The opportunities considered here are the ability to obtain a greater degree of international diversification and the ability to obtain funds at a lower cost.

The first section of this thesis will emphasize on a short-term overseas financing strategy that includes identifying the key factors, formulating and evaluating objectives, describing available short-term borrowing options, developing a methodology for calculating and comparing the effective after-tax dollar costs of these alternatives, and integrating the borrowing strategy with exposure management considerations.

The second section of this thesis will emphasize on analyzing and describing the various terms in international trade, accompanied with the necessary documentation associated with its procedure. In addition, it also examines the different methods and sources of export financing and credit insurance that are available to public sector. Lastly, it also addresses the countertrade issue.

The third section will address the mechanisms of multinational firm in shifting its liquid asset among its affiliates. This section also covers the discussions of international cash, accounts receivables, and inventory management.

The last section will analyze the benefits, costs, and constraint associated with the multinational financial system. The analysis will identify financial transaction that are made through external financial channels, and evaluate the various channels for moving money and profits internationally.

Document Type

Restricted Thesis

Recommended Citation

Lo, Ali, "A Study of Multinational Working Capital Management" (1991). All Theses, Dissertations, and Capstone Projects. 402.
https://griffinshare.fontbonne.edu/all-etds/402