International Finance Case Study
Please read the case study attached and then address the following questions.
Please make sure you divide the paper into sections based on the question youre answering. Example of a header for the question 1 would be:
1. Investment Strategy / Functional
1. Investment Strategy/ Functional review the companys investment in a large number of business areas. Comment on the advantages/disadvantages especially from a financial perspective.
2. Investment Strategy/Regional review the companys involvement in a number of very different geographic regions. Advantages/disadvantages?
3. Base Currency what are the special issues involved for a company with a small currency basis (Swedish krona) in a U.S. dollar-denominated world, especially given its multi-currency involvement?
4. Financial Management review the potential issues involving funding requirements and revenue streams from very different businesses such as the fixed investments in the meat business in South America and the dairy business in china vs. the trading businesses in Southeast Asia and others.
5. Business Distribution evaluate the financial results in 1995-96 (Exhibit 2). Do you agree with the companys conclusions on Core and FTC Businesses?
6. Financial Results evaluate 1997 results and compare to 1995-96. Comment on the firms financial status and trends prior to the strains of the Asia Currency Crisis. How was the company positioned financially for the forthcoming difficulties?
7. Financing focus on the companys extensive involvement in local currency exposures (non-US $). What were the financial implications of the generation of revenues in many Asian currencies? What were the implications of debt in those currencies?
8. Financing evaluate the decision to rely on U.S. $ debt. Comment on the tradeoffs between lower financing costs on foreign exchange exposure.
9. Asia Crisis financial management is especially important in periods of economic difficulty. The companys exposure in many markets made it sensitive to more crisis situations. Examine the negative impacts of the Asian crisis on the companys financial position from the viewpoints of investment, operational and translation perspectives. Comment on the companys reaction to these negative impacts.
10. New Strategic Approaches viewing the companys many issues suggest the optimum strategies for Investment, Debt Management and for Foreign Currency Management (reflecting the dilemmas confronting the CFO at the end of the case).
Comment on the potential of these strategies for financial management by the many subsidiaries.
11. Evaluation grade the companys performance in managing its financial issues in the period under review.