INTERNATIONAL FINANCE

International Financial Management

International Financial Management

Introduction

The most vital objective of large companies is to expand their operations in the long run. In order to do so, they need to hire a General Manager or a Managing Director. This person is responsible for the overall finance activities within the company. Financial decisions with regards to International business are often complex and risky. An articulate study of International finance facilitates investors for assessing and managing the perceived risks meant to hinder adequate financial management. Different risks need to be dealt with in order to make viable decisions.

Discussion

In order to witness how International Financial Management works to carry out a professional assessments of profitability. In the present assignment, we have chosen Unilever as a foreign market for which feasibility study would be conducted on Mongolia- a landlocked country in East and Central Asia.

Overview of the Company

Unilever is a multinational consumer goods corporation that was establish in 1930 by a British Lever Brothers and Dutch Margarine Unie. The aim of this company was to offer a better life with their brands and services which assist people to feel good, to look good and to expect more from life. Furthermore, Unilever has been looking for improvised ways to offer more hygienic, nutritious and quality products for communities (Unilever Website).

This company has been operating in every continent except for Antarctica. More than 400 brands are offered under the banner of Unilever. They have been using new strategies when entering into the new market and in different countries. The best part of this company is that their management analyzes each aspect i.e. financial and non-financial factors when expanding their operations. Due to this factor, Unilever's overall performance has been steady through years with 6.9% increase in underlying sales growth, 3.4% increase in underlying volume growth, 13.8% increase in core operating margin and 4.3 billion increased in Free Cash Flow during 2012(Unilever Website).

Selection of Foreign Market

Mongolia is now regarded as one of the fastest growing economies in the contemporary developing world. This might be the secret to the world as this country has been growing twice as fast as China and investors are not much aware of this potential market (U.S. Embassy In Ulaanbaatar Mongolia, 2012, p. 42). GDP of Mongolia has been set to grow at a blistering speed of 14.9% while China GDP has been forecasted to increase at 7.5% during 2012. Considering the previous trend, Mongolia overall economy has been increasing from last many years. This country is rich in natural resources and they have huge amount of deposit of copper, coal, molybdenum, tin, tungsten, and gold which leads them to be the third industrial production in the world (KPMG, 2012, p. 6).

Economic factors

The following economic factors were considered when selecting this country for further research. The reason to select this company is due to similar nature that Asian and Chinese have i.e. cheap product with good quality. Since this country have an average purchasing power like other Asian countries, ...