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Case study Analysis of international financial management

Corporate finance (fin 505), university of liberal arts bangladesh.

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Preview text, case study analysis, blades, inc. case, assignment: 4.

Name: Mehedi Hasan Sourav

ID: 192051014

Course Name & Code: International Financial Management (Fin 505)

Answer to the question no 1:

Calculation of net Baht Received in 90 Days:

Baht Inflow calculation

Pair Sold 45000

revenue per pair 4594

Number of baht received in 90 days 206730000

Baht Outflow Calculation :

Pair manufactured 18000

Estimated cost per pair 3000

Number of baht needed in 90 days 54000000

Net Baht Received (inflow - outflow) 152730000

Forward Hedge:

Sell Baht 90 days Forward:

Baht revenue 152730000

Forward rate of baht 0.

dollars to be received in 90 days $ 3,283,695.

Money market hedge:

Amount in baht borrowed now (152730000/1)

Dollar received from converting baht (146855769 $0)

$ 3,377,682.

Dollar accumulated after 90 days (3377682. x 1)

$ 3,448,614.

unhedged: probability possible spot rate in 90 days ($)

total dollar received from converting baht 5% 0 $ 20% 0 $ 30% 0 $ 25% 0 $ 15% 0 $ 5% 0 $ Expected value of cash to be received 3344023. 5

Forward Hedge: $3,283,695.

Money market hedge: $3,352,652.

Unhedged: $3,344,023.

Interpretation By analyzing Hedge and unhedged results I can say they must do hedged. The money market hedge seems to be the most suitable for hedge blades because it will give the highest value in dollars.

Answer to the question 2:

25 1 $ 5,960,

15 1 $ 6,000,, 5 1 $ 6,080,.

Expected value of cash to be received

Forward Hedge: $ 5,960,000.

Money market hedge: $ 6,005,882.

Put Option Hedge: All options are less than Money market hedge

Unhedged: $ 5,936,000.

Answer to the question 3

In general, it is easier for a blade to hedge its flow in foreign currency. This is because Blade is a reputable organization and Blade has done international agreement are also with reputable organizations so the chances of their contract being breached are very low. Another significant issue is the risk of foreign exchange transactions due to future exchange rate fluctuations. Since Blades has export agreements with its main customers, its dollar flow is not being uncertain due to changes in its exchange rate.

Answer to the Question 5 Blades could import sufficient materials quarterly. It could then instruct its Thai customer to make payment directly to the Thai supplier. So that they don’t need to currency conversion. This tradeoff accelerates the purchasing and reduce Blades transaction exposure.

Answer to the Question 6

Yes, Blades could modify its payment practices in order to reduce its transaction exposure. As they are currently making their payments ahead of schedule but there is a possibility of transaction exposure. In order to reduce this exposure, they must wait for a certain period of time in case of payment.

Answer to the question 7

Yes, Blades could benefit from long-term hedging techniques. We know that long-term hedging techniques are particularly appropriate for firms that can accurately estimate their foreign currency payables or receivables. For example, it could enter into long-term forward contracts for Thai baht and/or British pounds, swap currencies with another firm in the future, or agree to a parallel loan

• Multiple Choice

Course : Corporate Finance (FIN 505)

University : university of liberal arts bangladesh.

• More from: Corporate Finance FIN 505 University of Liberal Arts Bangladesh 22   Documents Go to course
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International Financial Management: A Case Study of Diageo Company

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International financial management case studies with solutions

Proficiency in cross-border financial operations management is essential for MBA students and professionals operating in the intricate realm of global finance. Global economic policies, overseas investment hazards, and currency exchange rates must all be thoroughly understood to comprehend international financial management. Studying International financial management case studies with solutions is one of the best approaches to understanding these ideas. Students can apply their academic knowledge and build practical skills by using the real-world circumstances provided by these case studies. We will discuss the importance of these case studies in this blog, along with a particular example and how they might improve your comprehension of an MBA financial management case study .

The Significance of International Financial Management Case Studies

A fundamental component of MBA programs, especially in financial management, are case studies. Through the process of working through real-world business problems, they enable students to close the gap between theory and practice. Case studies on international financial management that include solutions are very useful since they highlight the tactics and difficulties associated with managing funds internationally.

Global investment strategies, international trade financing, cross-border mergers and acquisitions, and currency risk management are just a few of the many subjects covered in these case studies.

Managing Currency Risk for a Multinational Corporation: A Case Study Example

Let’s examine managing currency risk for a global company in more detail as an example of an international financial management case study with solutions. In this instance, the exchange rate swings between the US dollar, the euro, and the Japanese yen pose a serious risk to a US-based business with operations in Europe and Asia.

Students must examine how currency fluctuations might affect the company’s profitability as part of the case study. It pushes students to investigate various hedging techniques, such as swaps, options, and forward contracts, to lessen this risk. The solutions offered show how the business can utilize a mix of various financial tools to lock in advantageous exchange rates and shield its profits from unfavorable fluctuations in foreign exchange rates.

Students get an understanding of the significance of efficient currency risk management in preserving a global company’s financial stability by going through this case study. The solutions also assist students learn how to balance risk and reward in global finance by illuminating the trade-offs associated with various hedging methods.

How International Financial Management Case Studies with Solutions Help Students

1. Utilizing Theoretical Understanding

MBA programs place equal emphasis on application in the real world and theoretical knowledge. Case studies on international financial management that come with answers are a great way to apply what you’ve learned in the classroom to actual circumstances. These case studies force you to exercise critical thinking and propose solutions to the financial problems encountered by global firms.

2. Acquisition of Problem-Solving Techniques

The development of problem-solving abilities is one of the key advantages of working on case studies with solutions related to international financial management. These case studies frequently highlight intricate, multidimensional issues that need for in-depth consideration and original thought. Working through these examples will teach you how to recognize important issues, weigh alternative strategies, and decide on the best course of action.

Students must choose the best hedging approach in the currency risk management case, for instance, considering the company’s risk tolerance, financial objectives, and market conditions.

3. Being Affected by Global Financial Issues

MBA candidates need to be ready to handle the rapid changes in the global financial scene. Students are introduced to the range of issues that arise in global finance through case studies on international financial management that include solutions, including exchange rate changes, political risk, and national regulatory variances.

4. Getting Ready for Actual Situations

The goal of MBA programs is to equip students for prosperous careers in business. International financial management case studies with solutions that include answers are made to mimic the kinds of situations you’ll run into in the real world. You’ll be more prepared to tackle the difficulties of foreign financial management later in your profession if you work through these situations.

An essential skill for MBA students is understanding worldwide financial management, especially if they want to work in global finance. International financial management case studies with solutions offer a useful and efficient approach to hone this skill. These case studies help you succeed in your MBA program and beyond by exposing you to global financial concerns, honing your problem-solving abilities, and applying theoretical knowledge to real-world circumstances.

These case studies are a great tool whether you’re working on an MBA Financial Management Case Study or getting ready for a job in international finance. They provide the knowledge and expertise required to confidently and expertly negotiate the intricacies of global financial management.

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Financial Management – A triptych in international finance: Shipping Investment – Case Study.

The research begins with a macroeconomic evaluation in 2000 and the repercussions on the derived demand for the seaborne trade, focusing the studies in the dry bulk sector. Subsequently, with the information provided in the case study, the financial assessment was developed through the Long-Term Asset Value (LTAV) method. The result of the analysis allows describing the positions of the three parties involved in the negotiation and their viability. What contractual details are necessary to adjust in further negotiations to be able to carry out the investment, as well as the embedded options available like abandon and expand the investment. Finally, the project concluded recommending a different pre-delivery trench approach, made investment of equity in the money market (term deposit) and the request of a short loan at LIBOR interest rate to cover the shipyard contract, for the initial Special Purpose Company (SPC) and a second SPC (SPC2) to expand the project through a different source of capital. Thus, the strategy was built after the analysis of the Discounted Cash Flow (DCF) and the comparison of the discount rate to the Internal Rate of Return (IRR).

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