Financial Analysis and Valuation
Week 2: Assignment
Hand-in Assignment
Read the case study, ‘VIZIO, Inc’, beginning on page 65 of the course text, Business Analysis and Valuation. Write a brief professional memo that evaluates VIZIO’s
domestic and international industry conditions,

and analyse VIZIO’s
corporate strategy and
sources of competitive advantage.
Use the Turnitin link below to submit your assignment.

Chapter 21

International Cash Management

Lecture Outline

Multinational Management of Working Capital
Subsidiary Expenses
Subsidiary Revenue
Subsidiary Dividend Payments

Centralized Cash Management

Techniques to Optimize Cash Flows
Accelerating Cash Inflows
Minimizing Currency Conversion Costs
Managing Blocked Funds
Managing Intersubsidiary Cash Transfers

Complications in Optimizing Cash Flow
Company Related Characteristics
Government Restrictions
Characteristics of Banking Systems

Investing Excess Cash
Determining the Effective Yield
Implications of Interest Rate Parity
Use of the Forward Rate as a Forecast
Use of Exchange Rate Forecasts
Diversifying Cash Across Currencies
Dynamic Hedging

Chapter Theme

This chapter emphasizes the decisions involved in the manage¬ment of cash by an MNC. The additional opportunities and risks of cash management for an MNC versus a domestic firm should be stressed. There are actually three key components of the chapter. The first is distinguishing between subsidiary control over excess cash versus centralized control. An argument is made in favor of centralized control. The second component is optimizing cash flow. Several techniques are recommended to optimize cash flow. Finally, the decision of where to invest excess cash should be discussed with consideration of all factors that need to be incorporated for this decision.

Topics to Stimulate Class Discussion

1. Should international cash management be conducted at the...

Similar Essays