What is meant by international Trade

According to J.L. Hanson – An exchange of various specialized commodities and services rendered among the corresponding countries is known as international trade.

According to V.M. Memani – International trade is a trade among different countries or trade across political frontiers.

According to M.C. Vaish – Foreign trade may be defined as the exchange of goods and service among the citizen of independent or sovereign states or countries.

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Feature

• Different of market system
• Different in national boundaries
• Foreign currency and rate of exchange
• Immobility of factors
• Import-export
• Balance of payment
• Various cost
• Dependency
• Trade and control

Causes

• Mobility of factors of production
• Different of climate
• Human capability
• Natural resources
• Market system
• Trend of economic development
• Expansion of market
• Knowledge of technology and technical
• Availability of capital and capital elements
• Difference in quality and price

Merits

• Export opportunities of product and services
• Expansion of industry
• Optimum utilization of resources
• Consumption of unproduced goods
• Specialization of labor
• Creating employment opportunities
• Increase efficiency of local entrepreneurs
• Increase international co-operation
• Increasing investment
• Progress in technological know-how
• Development of standard of living

Importance

• Facility to consume deficit or unproduced goods
• Opportunity to export surplus products
• Expansion o market and economic development
• Advantage of consuming goods at a low price
• Creating employment opportunities
• Ensuring optimum use of resources
• Developing the quality of product
• Development of standard of living

Demerits

• Import harmful and unnecessary goods
• Adverse conditions of trade
• Increase dependency
• Unequal competition and dumping
• Problems on excess production
• Excess uses of natural resources
• Barriers to balanced and local expansion of industries
• Expansion of imperialism
• Create international conflict

Documents used

1. Shipping document

• Bill of exchange
• Bill of lading
• Insurance policy
• Invoice
• Certified invoice
• Certified of origin

2. Non-shipping document

• Indent later
• Letter of credit
• Shipping report
• Charter party
• Pro-forma invoice
• Trust receipt
• Respondent bond
• Latter of indemnity
• Mates receipt
• Dock receipt
• Dock warrant
• Bill of exchange
• Shipping advice
• Bill o sight
• Sales contract
• Bottamary bond

Introduction to financial management

Financial management is concerned with the acquisition, financing and management in the business. Financial management is related to like accounting, economics, financing, mathematics, tax operation etc.

It is the specialized activity planning, organizing, directing and controlling with the top level financial management. It includes about money decision the capital structure, capital budgeting with short term and long term allocation.

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Definition

“Financial management, also referred to as corporate finance as managerial, is broadly concerned with the acquisition and use of funds by a business firm.”--- Prof. Prasanna Chandra

“Managerial management is concerned with the duties of the financial manager in the business firm.”--- Lawrence.J.Gitman

“Financial management is the operational activity of a business that is responsible for obtaining an effectively utilizing the funds necessary for efficient operations.”---Joseph Massie

Significance of financial management

The importance of financial management is wide are large. Every business affected financial activities with the money decision. Therefore, the significance of financial management is given below:

• Financial planning
• Successful business
• Smooth running of enterprise
• Facing unexpected risk
• Coordination of functional  functions
• Global competitiveness
• Business credit rating
• Paying regular dividends
• Protection of investment
• Improve profitability
• Help of decision making
• Promotion to save financial solvency
• Determination of business success
• Increase the value of the firm
• Measure the value of the firm

Function of financial management

Functions of finance are not goals the firm, but these achieve the ultimate goal of the firms. The following are the functional of financial management is below:

• Co-operation
• Organizing financial staff
• Relationship with stakeholders
• Protecting with shareholder’s interest
• Opportunity identification
• Management of cash
• Risk management
• Analysis of capital management
• Transact routing functions
• Ensure optimums liquidity
• Investment decision
• Need assessment of funds
• Capital structure decision
• Earnings retention and distribution
• Financial control

Features of financial management

Financial management is common in all types of business concerned with where to invest, how to invest, and how the investment should be managed. Especially with stock companies in need of financial management considerably both in the corporate sector. In the following section to focus on these unique features of financial management with the common features:

• Financial planning
• Forecasting flow of funds
• Investment decision making
• Protection of investment identification of sources of funds
• Procedural analysis of investment decision
• Retention and distribution of profit
• Debt-equity ratio analysis
• Risk-return trade- off
• Agency problem
• Controlled by professional managers
• Establishing financial relation and its protection

Principle of financial management

Financial management is the maximization of the wealth of the shareholder. This goal activity of financial management is to be operated under a set of principle. These can be called as the principle of finance the important role in decisions making made by financial management. So here we about the principle of financial management as follow:

• Optimum capital structure
• Annual budget plans
• The risk returns trade off
• Time value of money
• Liquidity and profitability
• Incremental cash flows
• Performance measurement
• Efficient capital market
• Competitive market
• The agency problem
• Principle of opportunity cost
• Principle of net present value
• Principle of coordination
• Taxes bias business decision
• Appropriate dividend policy

Goal of financial management of a firm

• Value of the firm and value per share
• Raising capital
• Investment of capital
• Protection of capital
• Maximization of wealth
• Maximization of profits
• Maintain steady earnings growth
• Avoid financial distress and bankruptcy

Social responsibility of financial management

The newest financial management strategies have run its operation the society while doing business. Every company has different social responsibility objectives through the main motive is the equivalent. The increased awareness of people social responsibility of the companies increased a lot. The corporate financial management is very existence depends on its being society's responsibility. The following are the social responsibilities of the financial management are as follows:

• Protecting investor interest
• Protecting consumers right
• Protecting creditors right
• Safe working conditions
• Ensuring pollutions free environment
• Maintaining fair hiring practices
• Ensuring a corruption free work environment
• Supporting education
• Proper use of resources

What is strategic management

According to L.L.Byars L. W. Rue – Strategic management is the process by which top management determines the long run direction and performance of the organization by ensuring that carefully formulation effective implementation and continuous evaluation of the strategy take place.

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According to Stoner – Strategic management  is the process of  broading program for defining and achieving an organizational objectives; the organization’s response to its environment over time.

According to Weihrich and Koontz – Strategic is the process of determining of the purpose and the basic long term objectives of an enterprise and the adoption of course of  action and allocation of resources necessary to achieve these aims.


According to Robins – Strategic management is the process of large scale, future oriented plans for interacting with the competitive environment to optimize achievement of an organizations objectives.

The nature and features of strategic management

• Long term plan
• Strategic plan
• Comprehensive plan
• Different program
• Effective plan
• Guideline of plan
• Consideration of environment
• Determination of alternatives
• Diversification
• Possibility of counter attack
• Diversification
• Strengths and weaknesses
• Opportunities & threats
• Achieving of objectives
• Internal communication

Benefits of strategic management

• Achievement  of organizational objective
• Setting long term objective
• Minimization of risk
• Proper guideline
• Utilization of resources
• Decreasing weakness
• Increasing threats
• Increasing internal strength

The five tasks of strategic management

• Developing strategic vision and mission
• Setting objectives – There two objective of financial, Strategic
• Crafting strategy
• Strategy implementation and
• Evaluating performance, monitoring developing and initiative corrective adjustment