Essay on International business finance report

On worldwide business finance report - Essay ExampleREPORT TO IBF Respected Directors, IBF London (U.K) Introduction IBF Supplies Plc is a London based large manufacturer and distributor of tallyice supplies. A recent forecast shows abate has been shown in the lease for office supplies in the UK. At the same time it is anticipates a self-coloured demand for office supplies in Eastern Europe, Asia and Africa over the next several years. Hence, executives of IBF harbor started exploring the overseas markets and argon readying to establish foreign subsidiaries in new markets. Before entering the market certain aspects are to be considered. These aspects include Financial and non-financial factors The potential risks and possible external strategies to manage such risks. Other strategies available otherwise(a) than establishing a foreign supplementary Financial and non-financial factors First of all it is to be made sure that whether the selected countries are going to produce the desired results or not. It is a good social occasion that IBF has anticipated a strong demand in Eastern Europe, Asia and Africa for the type of goods it manufactures but again a elaborated research necessarily to be done before taking any final decision. Developing a foreign subsidiary means establishing companys branch outside the country to run as a tell entity than IBF the parent company itself.There are a lot of things that withdraw to be considered like the policy-making stability of these selected countries, their legal systems, the fiscal policies, the monetary policies, availability of labor that is skilled, logistics infrastructure etc (Terpstra and Sarathy 2001). It is a good thing that IBF has a proactive approach but still there are a lot of things that are of utmost importance before any final decision can be harborn. The financial concomitant of the company happens to be one very important factor to be considered before IBF can take any decision. The tax bracket is to be kept in mind before actually deciding to expand the business to a new area. The net worth and the objectives of the company happen to be of diminutive importance. The level of risk that the company can afford to take is also a point of material importance. While considering the financial factors, IBF look ats to take a decision regarding choosing one of the two financing techniques or may be both the techniques. These two financing techniques are debt and equity financing. If IBF chooses debt financing to raise silver it means that the company will borrow money from another source like bank. IBF will have to return the loan with interest and it can be short term or long term. The other way is that of equity financing. In this way IBF can raise finance by selling off its business part to some other party like the investors or the venture capitalists. The company need to decide whether it is going to be generating funds locally or by the parent company. A detailed PESTEL Analysis is required that includes things like political factors etc. The forecasting regarding the exchange rates and the taxation bargain needs to be done before taking any final decision. It is to be kept in mind that these foreign subsidiaries are going to be exposed to volatility of exchange rates. IBF will need to evaluate its risk associated with exchange of foreign currency through monitoring