International Finance and Risk Management

Research Paper (undergraduate) , 2009 , 25 Pages , Grade: 1,0

Business economics - Investment and Finance

The globalization enables companies a rapid expansion of their international businesses. In particular, the former export champion Germany gets higher profits from increased worldwide business activities and sales opportunities. However, while the international expansion reaches daily new records, the risks for international business remain and should be considered seriously. The risks of international business are from different types and include economic, political, manufacturing, currency, and transport risks. For export transactions risk analysis of buyer and buyer's country plays an important role. Based on a thorough risk analysis, terms of payment and terms of delivery in the contract of sale could be developed. Moreover, hedging instruments like advance payment, letter of credit, payment guarantee from a bank, government Euler Hermes coverage, transport insurance and others arrangements could be used for international financing.

The object of this study is to learn and understand about international finance and risk management through evaluation of risks and opportunities for international expansion of a medium sized company. Thereby, country risks of Lebanon, Russia and Turkey are appraised using SWOT analysis. Furthermore, differences between political and commercial risks are studied. Various terms, e.g. INCOTERMS, Payment terms, Collection, and Letter of credit, are explained and compared. In addition, pros and cons of repaying of company's loan in Euro or Swiss Francs are assessed. Finally, the possibilities of money transfer inside Europe and to the US are illustrated. Besides the theoretical reflection concrete recommendations are given for the company.

Inhaltsverzeichnis

• Executive Summary
• Table of Contents
• List of Abbreviations
• List of Tables & Figures
• 1 Introduction
• 2 Main Part
  • 2.1 Country analysis using SWOT
  • 2.2 Differences between commercial risks and political risks
  • 2.3 INCOTERMS
    • 2.3.1 Definition and application
    • 2.3.2 INCOTERMS groups
    • 2.3.3 Recommendation for the company
  • 2.4 Payment terms
  • 2.5 Collection
  • 2.6 Comparison between Collections and Letter of credits
  • 2.7 Recommendation to favourite payment for the company
  • 2.8 Long-term loan in EURO (EUR) or SWISS FRANCS (CHF)
  • 2.9 Money transfer inside Europe and to the US
• 3 Conclusion

Zielsetzung und Themenschwerpunkte

This study aims to analyze the risks and opportunities for international expansion of a medium-sized company in Lebanon, Russia, and Turkey. The study utilizes SWOT analysis to evaluate political and commercial risks, comparing their impact on the company's expansion strategy. It explores various international finance terms, including INCOTERMS, payment terms, collections, and letters of credit, providing practical recommendations for the company. Additionally, the study examines the benefits and drawbacks of repaying a company loan in Euro or Swiss Francs, and explores money transfer options within Europe and to the US.

• International expansion risks and opportunities
• SWOT analysis for country evaluation
• Comparison of commercial and political risks
• International finance terms and practices
• Loan repayment strategies in different currencies

Zusammenfassung der Kapitel

The study begins by introducing the concept of international expansion and its associated risks and opportunities. It then delves into a country analysis using SWOT, examining the strengths, weaknesses, opportunities, and threats of Lebanon, Russia, and Turkey as potential expansion destinations. The study compares commercial and political risks, highlighting their distinct characteristics and impact on international business operations. It provides a comprehensive overview of INCOTERMS, including their definition, application, and various groups, offering recommendations for the company's international trade transactions. The study explores different payment terms, including collections and letters of credit, analyzing their advantages and disadvantages. It provides a detailed comparison of collections and letters of credit, outlining their key differences and recommending the most suitable payment method for the company. The study examines the implications of repaying a long-term loan in Euro or Swiss Francs, considering the exchange rate fluctuations and potential risks. Finally, it explores money transfer options within Europe and to the US, providing practical guidance for the company's international financial transactions.

Schlüsselwörter

The key words and focus themes of the text include international expansion, SWOT analysis, commercial risks, political risks, INCOTERMS, payment terms, collections, letters of credit, loan repayment, Euro, Swiss Francs, money transfer, Europe, and the US. The study provides a comprehensive overview of these topics, offering practical insights and recommendations for companies seeking to expand their operations internationally.

• College: University of applied sciences, Munich
• Grade: 1,0
• Author: Dr. Khanh Pham-Gia (Author)
• Publication Year: 2009
• Pages: 25
• Catalog Number: V132274
• ISBN (eBook): 9783640383474
• ISBN (Book): 9783640383160
• Language: English
• Tags: International finance, Risk management