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Finance in a global context - Coggle Diagram
Finance in a global context
Economic and financial flows
Balance of payments
Capital account
Current account
Financial account
Foreign direct investments
International financial institutions
International Monetary Fund (IMF)
The World Bank
Tax considerations and exchange rates
Transfer pricing
Alternative approaches: unitary taxation with profit apportionment
Obstacles
Path dependency
Vested interests
Technical issues
Arm's-length principle
Transfer mispricing: traditional approaches
The foreign exchange market
The impact of exchange rate
depending on
the price elasticity of demand for exports and imports
the availability of alternative markets to export to or other suppliers to switch to
the degree of competition in the market from overseas businesses
what proportion of its inputs are imported
what proportion of its sales are exported
The euro
benefits of the eurozone
managers do not have to worry about the effects of currency fluctuations with other eurozone countries
makes planning easier
provides greater stability
easier to compare prices of suppliers
allows a manager to find a better deal and force suppliers to be price competitors
no transaction costs fir converting currency to another
Overcoming exchange rate problems
overcome problems by
operate in several overseas markets
buy currency in advance at a set price
Target markets that use the same currency
speculate in currencies to try to offset any movements
set contracts in their own currency
Fundamentals of international financial reporting
stewardship
Managing the national economy
Imperialism
Information for investors
Taxation
Borrowed finery