GLOBAL HARDWOOD CORPORATION

Global Hardwood Corporation

Global Hardwood Corporation

Introduction

Global Hardwood Company is a multi-national fardwood manufacturing company. It is present n a number of countries. The company has been doing a good job; however, certain financial practices have led the company down. They have also adversely impacted the company's sales due to which the sales of the company have dropped. I have been appointed as the Group Treasurer to ensure good financial practices in the company and to make things better in the company.

I have been briefed of the company's current financial practices and i have also gone through the company's financial statements. While comparing them to the past years, I have noticed a drop in the sales in the United Kingdom region. The construction sector of teh company is losing its sales. In 2003, the construction sector produced 71% of the total sales of the company; however this percentage has dropped, and this setor now produces only 60% of the total sales. This should be considered and should be catered to because if no action is taken, the percentage will drop even more with the passing years.

This paper will first disucss the current financial practices of the company, in terms of its risks, threats, shortcoming and inefficiencies. It will then go on to explain what issues the company should look to solve before negotiating with any of the government. Next, it will discuss the risks that are associated with the inward investment, in case the company negotiates with the government of any of the country. In the end, it will propose a responsibility split between the chief accountant of the company and the gropu treasurer because the company currently only has a chief accountant who does not like the idea of hiring a group treasurer. Proposing a responsibility split will help him understand the need of a group treasurer in the company and will also ensure that the company does a good job in the future.

Current Financial Practices

The current financial practices of Global Hardwood Company are debatable. The company operates in a number of countries which means that the company should have s strong financial backing for smooth operation of the business (Thomas, 2001, pp. 32). The company's financial practice has certain drawbacks which are discussed below:

Risks

The company faces, not from other countries, but from the current financial practices. The company has a chief accountant who has been associated with the company for about thirty years and has vast knowledge about the hardwood industry. He has designed the financial aspects for the company; however, he is responsible to the Group Finance Director and eventually to the board of directors. The risk with the current financial practice is that the Global Hardwood Company is not doing a good job. The company was earning well in 2003, but since then the sales of the company has dropped and a major decline has been seen in the region of United Kingdom.

Threats

One big threat to the company is that the Group Finance Director has ...