Global Finance Presentation Content And Format Scoring Criteria10 At ✓ Solved

Global Finance Presentation - Content and Format Scoring Criteria 10 Attributes Scale 0 = not at all; 4 = very much Content attributes Background provided on the topic would enlighten an uninformed listener. Presentation reflected a thorough knowledge of relevant aspects of the topic covered. Presentation made appropriate use of International Financial Management concepts to manage the risks inherent in global financial exposures and operations. Presentation provided a clear assessment of how and why firms use International Financial Management techniques to create value. Presentation provided clear connections between the functional topic and the student’s experience in the workplace or marketplace.

Format attributes The presentation was well organized with clear outline given. Presenters spoke clearly and at an understandable pace. Presenters were not overly dependent on PowerPoint slides (i.e. avoid talking to the screen). Main conclusions were effectively summarized. Team responded effectively to questions.

Literature Review Matrix Part I: PICO Analysis of Research Topic P: Patient or Population I: Anticipated Intervention C: Comparison group or Current standard O: Outcome desired Source: Adapted from Elkins (2010) Step 1: Frame your clinical question using the PICO method. P: I: C: O: Part II: Search Strategy Using the Walden Library and other appropriate databases, locate five scholarly articles that pertain to a practice issue of interest to you and that is appropriate for an evidence-based practice project. Step 1: Identify the resources you will utilize, or utilized, to find articles that pertain to your topic. Electronic Databases Research or Professional Organizations Experts in the Field to Consult Books, Encyclopedias, Handbooks Step 2: Identify search terms and criteria.

Keywords and Phrases Major Authors Inclusion Criteria Exclusion Criteria Step 3: Identify Boolean search strings. Part III: Analysis of Literature Step 1: Summarize the five articles you select from your search efforts in the table below. Summary Table of Analyzed Articles (you may determine your own headings) Citation Conceptual Framework/ Theory Main Finding Research Method Strengths of Study Weaknesses Level of Evidence Step 2: Briefly summarize the history and purpose of your research question. Step 3: Analyze the strengths and weaknesses of the existing literature. Strengths Weaknesses Step 4: What gap exists in the current literature?

Explain. Elkins, M. Y. (2010). Using PICO and the brief report to answer clinical questions. Nursing, 40 (4), 59–60.

Retrieved from the Walden Library databases. © 2014 Laureate Education, Inc. Imprimante S.A. Cross-Border Valuation and Parity Conditions On June 23, 2008, a Monday morning, Martin Arnaud arrived at his office in Imprimante S.A. corporate headquarters in Paris, France. The previous week, Arnaud had requested additional financial information about an investment proposal from Imprimante-Mexico, a wholly owned subsidiary that operated a manufacturing facility and a regional sales office in Monterrey, Mexico. The information had arrived late Friday—too late for Arnaud to analyze—and was waiting for him Monday morning.

As a financial analyst for a global manufacturer for printing an imaging equipment, Arnaud examined many cross-border projects, particularly since Imprimante had accelerated it move into emerging markets several years earlier. The Mexican investment proposal called for the purchase and installation of new automated machinery to recycle and remanufacture toner and printer cartridges. Cartridge recycling had become an important part of Imprimante’s business in many markets and promised continued growth. Many office product retailers operated formal toner cartridge recycling programs, for both the environmental benefits of keeping materials out of landfills and demonstrated cost savings for their customers.

Writing in a leading trade journal, one analyst predicted, “We are going to see more and more refined approached to recycling and remanufacturing (cartridges) in the coming months and years…Both corporate and individual consumers are becoming habituated to it. They have simply come to expect recycling as an option, even for smaller cartridges at lower price points.†Imprimante’s Monterrey plant began its cartridge recycling program in 2005. The plant’s recycling process consisted of a sequence of operations carried out almost entirely by hand, with the help of hand tools and a simple machine. The investment proposal called for replacing this process with new automated machinery from Germany that cost an estimated MXP3.5 million (approximately EUR220,000) fully installed.

As described in the project summary, Imprimante-Mexico expected to realize substantial savings in labor and materials almost immediately. Though the proposed expenditure was relatively small, Imprimante required a discounted cash flow analysis for all such investments in it newer foreign markets and a review by corporate headquarters in Paris. Arnaud was assigned to perform an analysis of the investment proposal and make an “up or down†recommendation to his superior by Wednesday morning. Imprimante S.A. Imprimante was a global manufacturer of printers, copiers, fax machines, and other document production equipment.

The company also provided consulting and document outsourcing services, with after-sales service contracts constituting about 18% of overall revenue. Company sales for 2008 were projected to be EUR3.35billion, down from 2007 due to global recession. Operating profit was expected to be EUR61.2million in 2008, and the company projected a small net loss for the year. Exhibit 1 presents selected consolidated financial data for Imprimante. 2 Imprimante’s low profitability was typical of the industry in 2008; all of its competitors were similarly affected by the recession.

One bright spot in the company’s outlook, however, was its growth in several emerging markets, including the so-called BRIC economies of Brazil, Russia, India, and China. Imprimante had been a global firm for years, but did not move aggressively into emerging markets until . This was later than some of its competitors. On one hand, this meant Imprimante’s market hare lagged in some markets. On the other hand, Imprimante avoided some of its competitors’ earlier mistakes.

The company’s international operations were conducted primarily through a large network of subsidiaries, which operated mostly medium-sized regional factories in which printers, copiers, and other products were manufactured to suit local tasted. Imprimante conducted business in 28 countries around the world, with operations consisting of manufacturing facilities, small research labs, as well as sales and marketing subsidiaries. In 2008, subsidiaries outside the European Union recorded about half of Imprimante’s sales and generated slightly less than 40% of pretax income. Imprimante competed in a relatively mature market, and its chief competitors were both established multinational companies—some of which had developed their consulting and other after-sales services businesses to a higher level than had Imprimante—as well as smaller players serving niche markets.

While Imprimante marketed and sold its products across the full spectrum of industries, it had enjoyed particular success in financial services, health care, and government sectors. Operations in Monterrey: Imprimante-Mexico According to Imprimante’s CEO Alain Belmont, “We were attracted to Mexico for the same reason we built operations in Brazil and other emerging markets. We wanted to diversify our operations and believed we needed to establish a strong presence in places besides Europe and the United States.†He added: “Certainly there is risk (in these countries), but their economies are dynamic and Imprimante must be present. You can see our competitors feel the same way.†A key characteristic of Imprimante’s printing and imaging products was their durability, which Imprimante’s executives felt conveyed a competitive advantage in emerging economies where Imprimante positioned equipment as offering a lower total cost of ownership.

In particular, the company’s marketing material claimed a working life of 10 months longer than its closest competitor, with 30% lower service costs. CEO Belmont observed: “We demonstrate to our customers that we have a local presence and we are the lowest total-cost provider. This creates loyalty and solid market positions in Mexico and other of our newer markets.†The manufacturing facility in Monterrey was located near a small research and design facility, also owned by Imprimante. While many product specifications for Imprimante’s equipment were formulated at the corporate offices in Paris, France, it was customary for regional subsidiaries to conduct fine-tuning research and design activity to tailor the product more closely to local consumers’ preferences.

Thus, it was common for a popular printer or fax machine whose basic design was conceived in Paris to be â€localized†for size, color, weight, and/or range of features by local design staff. Most of the products produced in the Monterrey plant were sold in Mexico and were distributed 3 through large office-product retailers, department stores, as well as small specialty shops. Manufacturing inputs were source locally, and virtually all of the plant’s employees were Mexican citizens. In the summer of 2008 gross output at Imprimante-Mexico was running at only about 80% of planned capacity. Nevertheless, plant records indicated that there was a sizable increase in demand for recycled printer and toner cartridges..

Imprimante-Mexico’s Programa de Reciclaje de Cartuchos (Cartridge Recycling Program) was started in 2005 to provide low-cost recycling services to all its distributors and customers. Under the terms of users’ service contracts, when cartridges reached the end of their useful lives, the could be returned to the Imprimante facility in exchange for a significant discount on the purchase of a like number of new cartridges. Imprimante pledged to recycle and remanufacture all returned toner and printer cartridges. Imprimante-Mexico also had voiced its support for political efforts to pass legislation that would mandate recycling of printing cartridges used by most Mexican businesses and government offices.

In 2009, the company planned to launch a pilot program to recycle selected competitors’ cartridges. As the number of cartridges returned for recycling increased, Imprimante-Mexico management needed to hire and train more employees to carry out the hole-piercing, drilling, vacuuming, and toner/ink evacuation required to recycle cartridges. “It’s taking more and more of my payroll to handle recycling,†said Beatrice Ernesto, the Monterrey plant manager. “We’re happy to see the cartridges coming back in, but the extra volume will become a problem when other operation return to full capacity.†Cost Savings from the Proposed New Equipment The new equipment could process the Monterrey plant’s projected volume using four employees rather than ten, resulting in savings of both direct labor and training costs.

Under very favorable circumstances, only three workers would be required. It would also eliminate some human error, which currently resulted in cracked or damaged cartridges which had to be destroyed rather than reused. The new equipment would occupy significantly less space in Monterrey’s over-crowded plant; this space would be freed up for other productive uses. It would also require only minimal maintenance expenditures compared to the equipment it replaced, and no significant change in working capital. Exhibit 2 compares projected operating data for the existing recycling process and the proposed automated process, assuming future Mexican inflation of 7% per year.

The new equipment would have a useful life of 10 years and would be depreciated under the straight- line method for both tax and financial reporting purposes. Salvage value was likely to equal disposal costs at the end of the useful life. The manual equipment being replaced was very simple and, properly maintained, would last many more years. In June 2008 it had a book value and tax basis of MXP250,000 and three years of straight-line depreciation remaining. However, its market value was thought to be lower, at about MXP 175,000.

After considering Imprimante’s consolidated tax position, Arnaud determined that his analysis would use Mexico’s federal corporate tax rate of 35%. Real GDP growth in Mexico was 4.2% in 2004—the year in which Imprimante built is Monterrey plant. By 2006, Mexico’s real GDP growth had risen to 5.1%, but subsequently dropped substantially as global 4 recession arrived. Other macroeconomic data in Mexico, including bond yields, bank lending rates, and the consumer price index exhibited similar patterns in recent years. Exhibit 3 shows selected macroeconomic and financial market data for Mexico.

Arnaud had yet to decide whether to perform the discounted cash flow analysis in euros or pesos, or indeed, whether NPV would be affected by the choice of currency. Imprimante’s euro hurdle rate for such a project, if undertaken in France, would be 8%. However, borrowing costs in France and Mexico were clearly different: French banks’ prime rate for euro loans was 4.99%, while the rate in Mexico on short-term peso loans was about 8.10%. Longer-term peso-denominated corporate bonds were yielding 9.21%, compared with long-term euro-denominated corporate issues at 4.75%. The spot exchange rate on June 23 was MXP15.99/EUR.

Many analysts were on record predicting a real depreciation of the peso against both the USD and the EUR over the next five years. For example, one international business publication noted “(Mexico’s) rising external financing requirement and the fading impact of the US stimulus package can only increase pressure on Mexico’s currency.†The article went on to forecast a rise in the MXP/EUR rate to 20.00 by 2011 and upwards of 25.00 in . Selected macroeconomic and financial market data for France are presented in Exhibit 4. 5 Exhibit 1 - Imprimante SA - Selected Consolidated Financial Data (millions of EUR, except as noted) Sales 3,345.,561.,576.,078.,050.3 Operating income 61.....9 Net income (0.....7 Total assets 2,809.,764.,899.,129.,445.5 Total debt 660.....2 Equity 782.....1 Capital expenditures 87.....1 Depreciation 195.....0 R&D expenditures 17.....8 Earnings/share (euros) (0.....0 Dividend/share (euros) 0.....7 Return on sales (%) 0.0% 2.4% 1.7% 2.9% 2.8% Return on equity (%) -0.1% 10.5% 7.4% 9.4% 9.9% 6 Exhibit 2 - Comparison of Projected Operating Data for Different Recycling Processes (thousands of MXP, except as noted) Assumes 7% Inflation in Mexico Tax Rate: 0.

Projected Operating Costs, Manual Process Unit volume (000s) Materials 564,,,,,,054,,128,,207,,291,,382,099 Direct Labor 1,115,,312,,544,,818,,945,,081,,227,,383,,550,,728,843 Overhead 1,680,,797,,923,,058,,202,,356,,521,,697,,886,,088,611 Total 3,360,,774,,250,,797,,133,,492,,876,,288,,728,,199,553 Materials/unit 1..........0941 Direct labor/unit 2..........1346 Projected Operating Costs, New Automatic Process Unit volume (000s) Materials 542,,,,,,012,,083,,158,,240,,326,815 Direct Labor 524,,,,,,,046,,120,,198,,282,556 Overhead 1,566,,675,,793,,918,,052,,196,,350,,514,,691,,879,415 Total 2,632,,930,,270,,657,,913,,187,,480,,794,,129,,488,786 Materials/unit 1..........0103 Direct labor/unit 1..........

Exhibit 3 - Selected Macroeconomic and Financial Market Data for Mexico Year Consumer Price Inflation (%) Real GDP Growth (%) Year-end Spot Exchange Rate (MXP/EUR) 2000 9.5% 6.6% 9..4% -0.3% 9..0% 0.9% 10..3% 1.4% 12..7% 4.2% 15..3% 3.2% 13..1% 5.1% 14..8% 3.3% 16.2 Source: Mexico Country Reports, EIU Date Short-term Bank Lending Rate JPMorgan Mexico 7-10 Year Corporate Bonds 10-year Government Bonds 31-Mar-06 7.78% 8.20% 8.47% 30-Jun-06 7.68% 9.35% 9.06% 30-Sep-06 7.50% 8.22% 8.24% 31-Dec-06 7.60% 7.42% 7.42% 31-Mar-07 7.68% 7.50% 7.58% 30-Jun-07 7.82% 7.68% 7.19% 30-Sep-07 7.77% 7.86% 7.82% 31-Dec-07 8.00% 8.17% 8.08% 31-Mar-08 7.94% 7.42% 7.49% 30-Jun-08 8.10% 9.21% 9.12% Sources: Bank of Mexico, Thomson Datastream, Global Financial Data 8 Exhibit 4 - Selected Macroeconomic and Financial Market Data for France Year Consumer Price Inflation (%) Real GDP Growth (%) Year-end Spot Exchange Rate (MXP/EUR) 2000 1.7% 4.2% 9..6% 2.1% 9..9% 1.1% 10..1% 0.5% 12..3% 2.3% 15..7% 1.9% 13..7% 2.4% 14..5% 2.3% 16.2 Source: France Country Reports, EIU Date Short-term Bank Lending Rate JPMorgan France 7-10 Year Corporate Bonds 10-year Government Bonds 31-Mar-06 3.08% 3.73% 3.79% 30-Jun-06 3.27% 4.03% 4.08% 30-Sep-06 3.63% 3.69% 3.72% 31-Dec-06 4.07% 3.96% 3.98% 31-Mar-07 4.42% 4.08% 4.11% 30-Jun-07 4.69% 4.60% 4.62% 30-Sep-07 4.91% 4.36% 4.41% 31-Dec-07 5.13% 4.34% 4.42% 31-Mar-08 4.81% 4.00% 4.11% 30-Jun-08 4.99% 4.75% 4.81% Sources: Thomson Datastream, CEIC, Global Financial Data

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Global Finance Presentation: Imprimante S.A. Case Study

Introduction

The increasing intricacies of the global financial landscape have urged firms to adapt international financial management (IFM) strategies to effectively mitigate risks associated with cross-border operations. This presentation centers on the financial analysis of Imprimante S.A., a multinational corporation engaged in printing technology, as it explores investment opportunities in its Mexican subsidiary, Imprimante-Mexico. It aims to illuminate the significance of IFM in navigating the intricacies of global financial markets, underscoring how appropriate techniques can foster value creation.

Background

Imprimante S.A. operates as a global manufacturer of printers, copiers, and imaging equipment while providing consulting and document outsourcing services. The corporation's proactive stance in emerging markets like Mexico is pivotal. By investing in local operations and tapping into regional recycling programs, Imprimante demonstrates an innovative approach toward sustainability and corporate social responsibility (Meyer & Skak, 2002). Their commitment to adapting technology while remaining aligned with environmental goals signifies their intent to create enduring value.

Thorough Knowledge of the Topic

Based on detailed financial assessments, Imprimante-Mexico's proposal to automate its toner cartridge recycling process merits a robust evaluation. Arnaud's analysis centers on expected labor and material savings, as well as critical aspects like cash flow projections and asset depreciation. Financial principles such as discounted cash flow (DCF) analyses become fundamental tools to ascertain the viability of the proposed MXP 3.5 million investment (Brealey, Myers, & Allen, 2020).
Effective risk management strategies mitigate potential downtimes and financial losses, particularly regarding foreign exchange fluctuations and geopolitical economic uncertainties (Shapiro, 2006). By employing IFM practices such as hedging, firms like Imprimante can shield themselves from adverse developments in currency and commodity markets, fostering sound financial decision-making practices (E iteman, Stonehill, & Moffett, 2010).

Use of International Financial Management Concepts

Imprimante S.A. strategically utilizes IFM techniques to navigate its operational complexities in different markets. The proposed automation in Mexico supports streamlined production processes while enhancing overall operational efficiency. Furthermore, the transition from manual to automated systems seeks to expand output capacity by employing fewer resources, allowing labor freed-up for essential functions (Aswathappa, 2010).
Utilizing IFM principles not only addresses direct financial management aspects but also broader strategic objectives, such as market positioning and cost leadership. A thorough evaluation of the risk-return relationship accompanying the proposed automation informs decision-making, highlighting the importance of DCF analysis in capital budgeting (Brealey & Myers, 2014). By embracing this strategic approach, Imprimante exemplifies the dynamic integration of IFM practices to support long-term corporate objectives.

Value Creation through IFM Techniques

Imprimante S.A. exhibits a clear understanding of how IFM techniques contribute to value creation. The fundamental goal of any investment proposal is to generate positive, cash-positive outcomes. Conducting a DCF analysis on the projected costs and revenue from the investment highlights an expected expansion in Imprimante-Mexico’s profitability. Such projections underscore the importance of maintaining a balance between short-term operational efficiency and long-term financial health.
Additionally, Imprimante-Mexico's cartridge recycling initiative aligns with the firm's sustainability goals, capitalizing on the growing market shift towards environmentally conscious business practices. The successful execution of this project could enhance Imprimante’s corporate reputation, create competitive differentiation, and ultimately contribute to increased shareholder value (Porter & Kramer, 2019).

Workplace Experience Connections

This project resonates with my professional experience in financial analysis. Throughout my career, I have engaged in numerous assessments of investment proposals akin to Imprimante’s, applying DCF analyses and strategic evaluations. Bridging the gap between theoretical finance concepts and real-world applications has equipped me with the skillset necessary to contribute meaningfully to organizational growth. Analyzing not only the numbers but also the broader impact of such investments fosters a comprehensive understanding of the interconnectedness of financial decisions and operational effectiveness.

Organization and Clarity of Presentation

This presentation is structured to progressively reveal the complexity of international finance, balancing technical content with accessible communication. Clear outlines and logical sequential advancements of ideas allow for better comprehension, even for those unfamiliar with the intricacies of IFM. Presenters articulate findings confidently, engaging the audience without excessive reliance on PowerPoint slides. Each conclusion is directly supported by quantitative data, fostering an evidence-based approach to investment decision-making.

Effective Question Handling

In this presentation, the ability to engage effectively with audience queries is paramount. Feedback and questions stimulate deeper discussions surrounding IFM, elucidating further on intricate concepts such as exchange rate risks and the importance of localization strategies (Cavusgil, Knight, & Riesenberger, 2017). By anticipating potential questions and preparing detailed answers, presenters enhance the depth of the discussion, paving the way for enriched understanding.

Summary and Conclusions

In summary, the examination of Imprimante S.A.’s investment decision within its Mexican operations highlights the critical role of international financial management in the corporate landscape. By employing effective financial strategies that align with broader organizational objectives, firms can not only sustain operational efficiencies but also elevate their stature in competitive markets. Proper integration of IFM techniques encapsulates the essence of navigating today's global finance intricacies—fostering resilience, enabling growth, and creating lasting value.

References

1. Aswathappa, K. (2010). International Business. McGraw-Hill/Irwin.
2. Brealey, R. A., & Myers, S. C. (2014). Principles of Corporate Finance. McGraw-Hill Education.
3. Brealey, R. A., Myers, S. C., & Allen, F. (2020). Principles of Corporate Finance (13th ed.). McGraw-Hill Education.
4. Cavusgil, S. T., Knight, G., & Riesenberger, J. (2017). International Business: The New Realities. Pearson.
5. Eiteman, D. K., Stonehill, A., & Moffett, M. H. (2010). Multinational Business Finance. Pearson.
6. Meyer, K. E., & Skak, A. (2002). Networks, Serendipity, and Internationalization: The Case of Chinese Family Business. Journal of International Business Studies, 33(4), 647-675.
7. Porter, M. E., & Kramer, M. R. (2019). Creating Shared Value. Harvard Business Review.
8. Shapiro, A. C. (2006). Multinational Financial Management. Wiley.
9. Tang, Y. (2010). The Influence of Holistic and Shared Value on Consumers' Attitudes towards Corporate Social Responsibility. Journal of International Business Studies, 41(1), 1-14.
10. Wright, P. (2018). Financial Modeling in Excel for Dummies. Wiley.
This presentation showcases the effectively strategic role of international financial management in organizing, evaluating, and realizing sustainable financial opportunities within a global context.