How will accomplishing these objectives support your success in management? What risks or challenges might a manager encounter if they have not mastered these objectives? Explain. – FINA 410 International Financial Management Objectives Paper.
It is important for senior managers to understand that there are several issues that influence their success in management. To start with, the use of derivatives has become an influential means of enabling companies to seek alternative ways of operating risks and managing their finances. Every business is exposed to financial risks, and the main challenge is to determine how derivatives can be utilized to control these risks (Chance & Brooks, 2015). For multinational organizations, application of international tax strategies will be critical in avoiding the risk of litigations due to failure to comply with tax requirements. In addition, management of working capital ensures that the company is able to operate sufficiently as it caters for maturing short-term debt and other operational expenses. The capital structure of the organization will also be influenced by global cash integration.
These are the objectives:
- Interpret derivatives and risk management, and apply international tax planning to management issues
- Actualize working capital management and global cash flow integration
- Compose a capital structure and a distribution policy
- Calculate the cost of capital, capital budgeting, debt instruments, and markets
- Assess stocks and stock markets
- Calculate risk, returns, and financial statements
- Assess comparative exchange rate analysis, international trade, and foreign direct investment
- Explain the global financial environment
The set objectives can be accomplished by assessing the risks and opportunities that the company is exposed to. Depending on the cost of capital and the policies that influence the capital budgeting processes, the manager needs to have the abilities of developing a capital structure that will ensure that the organization can achieve both short-term and long-term objectives. The main challenge is associated with calculating risks, financial statements, and returns especially when the company is dealing with access to foreign stocks and stocks markets. Studies have shown that for shown that stock markets abroad can be very volatile and this increases the risks of reducing the valuation of the company (Chandra, 2011). However, these are some of the issues that have to be considered when analyzing the performance of international trade, exchange rate fluctuations, and the profitability of foreign direct investment. The global financial environment influences the success of an organization with regards to availability, cost and flow of capital. This will impact on the ability of the organization to invest and expand its operations.
Chance, D., & Brooks, R. (2015). Introduction to Derivatives and Risk Management. Boston: Cengage Learning
Chandra, P. (2011). Financial Management: Theory and Practice. New Delhi: Tata McGraw-Hill Education.