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Financial Management in Multinational Organizations - Research Paper Example
Finance & Accounting
Pages 10 (2510 words)
Running Head: Financial Management in Multinational Organizations Financial Management in Multinational Organizations Executive Summary The key purpose of financial management in multinational organizations is to maximize shareholder wealth…
In addition, it becomes convenient for an organization to draw additional funds from the shareholders if it supports shareholder wealth maximization. Financial management also helps organizations in financial planning and controlling, and evaluation of risks. It has been rightly argued that maximizing shareholder value perhaps only most effective method to benefit every stakeholder. Table of Contents Executive Summary 2 Introduction 4 Maximizing Shareholder Value 5 Financial Planning and Control 6 Forecasting 7 Investment 7 Exchange Risk 7 Credit Risk 10 Conclusion 10 References 13 Introduction Multinational organizations are firms that take part in some type of global business. Their financial management involves global investing as well as financing choices that are planned to capitalize on the worth of the multinational organization. Firms may primarily try to sell products abroad to a specific nation or trade supplies in from an overseas producer. However, in due course a number of them identify further prospects and finally start subsidiaries within foreign nations. International financial management is vital even for firms that have no global dealings. These firms are required to be familiar with how their overseas rivals will be influenced by activities within “exchange rates, foreign interest rate, labor costs” (Kyaw et al, 2011, p. 21), and price rises. ...
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