GROUP NO.

-6 UNDER THE GUIDANCE:-

 NEHA SHARMA
 HIMANSHU SHARMA  MR. OMENDRA
AWASTHI
 MADHU YADAV
 ASHOK VERMA
 DIVYA ANAND
 1.International financial
management is the
process of managing a
business' finances
across nations. Many
businesses have to do
this because they are
global.

 2. The main objective of

international financial
management is to
maximize shareholders
wealth.
 International financial management deals with the financial
decisions that are taken in the area of international business.
The growth of the International business is in the evident form
of highly inflated size of international trade. International
Financial management involves the proper management of
international flow of funds
1. Investment Decision:
2. Working Capital Decision:
3. Dividend Decision:
4. Financing Decision:
 Evaluating the risk involved, measuring the
cost of fund and estimating expected benefits
from a project comes under investment
decision. It is one of the important scope of
financial management. The two major
components of investment decision are –
Capital budgeting and liquidity.
 Decisions related to working capital is another
crucial scope of financial management.
Decisions involving around working capital
and short term financing are known as
working capital decision.
 It determines the amount of taxation that
stockholders pay. A good dividend policy
helps to achieve the objective of wealth
maximization. Distributing the entire profit in
the form of dividends or distributing only a
certain percentage of it is decided by dividend
policy
 Financing Decisions focuses on the
accountabilities and stockholders’ equity side
of the firm’s balance sheet, for example
decision to issue bonds is a kind of financing
decision
The international monetary
system is the structure of
financial payments,
settlements, practices,
institutions and relations that
govern international trade and
investment around the world.
There have been four phases/ stages in the evolution
of the international monetary system:

1.Gold Standard (1875-1914)

2.Inter-war period (1915-1944)
3.Bretton Woods system (1945-1972)
4.Present International Monetary system
(1972-present)
1. GOLD STANDARD(1876-1913)

 The gold standard is a monetary system in

which each country fixed the value of its
currency in terms of gold. The exchange rate
is determined accordingly.
 Let’s say- 1 ounce of gold = 20 pounds (fixed
by the UK) and 1 ounce of gold = 10 dollars
(fixed by the US).
 After the world war started in 1914, the gold
standard was abandoned.
Countries began to depreciate their currencies to
be able to export more. It was a period
of fluctuating exchange rates and competitive
devaluation.
In the early 1940s, the United States and the United Kingdom began
discussions to rebuild the world economy after the destruction of
two world wars. Their goal was to create a fixed exchange rate
system without the gold standard.
The new international monetary system was established in 1944
in a conference organised by the United Nations in a town named
Bretton Woods in New Hampshire (USA).
 The Bretton Woods system collapsed in 1971. The United
States had to stop the convertibility to gold due to high
inflation and trade deficit in the economy.
Inflation led to an increase in the price of gold. Hence, the US
could not maintain the fixed value of 35 dollars to 1 ounce
of gold.
In 1973, the world moved to flexible exchange rate system.
In 1976, the countries met in Jamaica to formalize the new
system