The Importance of International Financial Management IFM to the Corporation

This report analyzes the importance of international financial management (IFM) to corporations with a focus on Lindt & Sprüngli. It critically evaluates the company's dividend distribution policy, efficient market hypothesis theory, and methods of appraising projects. The report concludes that international finance is crucial for businesses in today's globalized world.

The Importance of
International Financial
Management IFM to the
Corporation

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BOSY..................................................................................................................................................3
Critically analyses and evaluate chosen multinational corporation’s dividend distribution policy..........3
Critically analyse the efficient market hypothesis theory in the context of your chosen multinational
corporation’s operations.........................................................................................................................5
Critically analyse and evaluate your chosen multinational corporation’s methods of appraising
projects....................................................................................................................................................6
CONCLUSION...............................................................................................................................................7
REFERENCES................................................................................................................................................8

INTRODUCTION
International financial management often refers to international finance, is the
administration of finances in a worldwide commercial setting, i.e., selling and earning profit
through to the conversion of fiat exchange. Foreign financial activities assist firms in connecting
with international commercial partners such as clients, providers, and loans. Federal agencies
and non-profit organizations use it as well (Le and et.al, 2020). This report based on the Lindt &
Sprüngli is a well-known champion in the chocolate confectionery business, with a wide range of
goods available in more than 120 countries. Lindt & Sprüngli has earned the reputation as one of
the most innovative firms in the luxury chocolate industry, with 175 decade of knowledge and
creativity. Among some of the 25 Lindt & Sprüngli worldwide companies, Lindt & Sprüngli
(USA) Inc. is the quickest. Lindt USA is located in Stratham, New Hampshire, five minutes from
the beach and an hour north of Boston. In this report consist of dividend distribution policy,
hypothesis theory and methods of appraising projects.
MAIN BOSY
Critically analyses and evaluate chosen multinational corporation’s dividend distribution policy
Dividends are typically paid from a company's profits. If a corporation pays out more
dividends than it earns, the payout may have become unstable, which is far from desirable. A
easy technique to determine if a dividend is viable is to compare dividend payments to a firm's
total income after taxes. Lindt & Sprüngli, a chocolate manufacturer, gave out 83 percent of its
profit in dividends during the previous twelve months. It pays out the majority of its profits,
restricting the number that can be returned in the company. This could imply that the company
has a limited need for additional cash or that it is capable of paying a dividend (Huang, Potter
and Eyers, 2020).
The dividend has remained consistent for the previous ten years, which is fantastic. We
believe this indicates the company's and dividends' long-term viability. The first yearly payout
was CHF450 in 2011, increasing to CHF1.1k last year, over the previous ten years. Dividends
per share have increased at a rate of about 9.3% every year during this time. Analysts believe this
is an appealing mixture because dividend has grown at a healthy rate over all this time frame,

and there have been no big decreases in the payout throughout time (Hackius and Petersen,
2020).
The dividend-bearing wealth (the number of regular shareholdings and involvement
credentials) can modify between January 1, 2021 and the record date of May 7, 2021 as a
consequence of expansions and retirement plans within another category of marketable securities
(registration shareholder and involvement accreditations), and also the workout of powers given
it through employee stock ownership strategy (Wamba, 2020).
Whenever looking at a dividend stock, it's important to consider whether the dividend
will rise, if the firm will be able to keep it in a variety of economic conditions, and even if the
dividend distribution is long-term. Lindt & Sprüngli pays out more than half of its profits in
dividends, yet the payout is supported by both declared earnings. Second, while earnings per
share have decreased, dividends have remained reasonably consistent. To summaries, analysts
find it difficult to be enthusiastic about Lindt & Sprüngli from a dividend standpoint. It wasn't
that experts think it's a horrible company; it's just that some businesses work better on these
metrics.

Although dividend payments have been generally consistent, it would be excellent if
profits per share (EPS) increased, as this is critical to the payout's lengthy buying power. Lindt &
Sprüngli's EPS appears to have fallen at a rate of roughly 4.1 percent per year during the last five
years. A small drop in earnings per share isn't ideal, but it doesn't necessarily mean a dividend is
excessive. Whenever it comes to dividend equities, though, we'd much rather see EPS growth
(Firmansyah and Maemunah, 2021).
Critically analyse the efficient market hypothesis theory in the context of your chosen
multinational corporation’s operations
According to the efficient market theory, additional knowledge enters the market and is
quickly represented in asset values; therefore neither quantitative nor structural research can
cause excessive profits. The author looks at recent studies on behavioral finance, movement
trading, and popular basic ratios that claimed to refute the idea and determine that this is not
relevant in the long term. As a result, he believes the efficient market theory is still viable.
Despite repeatedly harsh circumstances, Lindt & Sprüngli achieved sales increase of +4.8
percent in Swiss francs, resulting in group sales of CHF 4.1 billion. Given the mainly saturated
chocolate marketplaces, the shifting retail environment, and rising pricing pressure, this is a
strong showing. The Group's own system of stores, where sales surpassed 50 million Swiss
francs for the first time, as well as the given enough time of the Group's own system of shops,
deserve special notice. Lindt & Sprüngli outperformed the chocolates industry as a whole in the

past financial year, increasing its market share in practically every commercial arena (Wang and
et.al, 2021).
Lindt is a well-known brand with over 400 chocolate stores, businesses, and cafés in
countries such as the United States, France, Germany, Brazil, South Africa, Japan, China,
Russia, India, Canada, Mexico, and the United Kingdom. It began as a tiny chocolate shop in
Zurich and subsequently expanded to include a factory in Horgen. As a direct outcome, a
secondary store in Paradeplatz was opened. Through time, the business carved out a niche for
itself with its delectable goods, and it now works from its home in Kilchberg, Switzerland. The
company has maintained its pricing approach and is confident in the devotion of its consumers.
Furthermore, the high costs are part of the company's activities because they set the goods apart
from the competition. Lindt products are beloved by both children and young adults, thus the
brand's pricing structure remains unchanged.
Lindt provides a selection of product sizes and forms to appeal to consumers and market
them at a price that is convenient for them. Lindt has established itself as a Luxury Swiss
Chocolate Maker, with an upscale, wealthy, and sophisticated core demographic who do not
consider price while purchasing such elevated goods. Furthermore, Lindt's chocolate portfolio is
focused on elevated goods. In the West, transactions like count lines lose, whereas premeditated
expenditures like tablets and seasonally chocolate exceed general chocolate confectionary
revenues. This trend is consistent: between 2015 and 2020, Western Europe's general chocolate
confectionery industry will grow at a 1% CAGR, while festive chocolate and tablets will both
grow at a 2% CAGR in fixed value. Increasingly stores are prohibiting the sale of confectionery
at checkout process, which, along with the rise of e-commerce, will reduce the potential for
compulsive chocolate transactions (Taschner and Charifzadeh, 2020).

The purchases and mergers as brand factories of numerous chocolate enterprises -
Chocolate Grison, Nago Nährmittel AG, and Gubor Schokoladefabrik – aided Lindt's
stratospheric expansion, which reached c.900 million Swiss Francs by the early nineties. By
activating additional locations in New York, France, Italy, and Austria, as well as purchasing the
tradition-rich chocolate producer "Caffarel" and Ghirardelli Chocolate Business, the corporation
took another step toward becoming the leader in the premium quality chocolate category. The
merger with Russell Stover Candies (USA) in 2014, though, was the most significant strategic
purchase, complimenting the current luxury brands becoming the third North American
chocolate maker.
Critically analyse and evaluate your chosen multinational corporation’s methods of appraising
projects
These are mentioned different project appraising methods which are followed by the Lindt &
Sprüngli such as:
Projects variables addressed in economic analysis include demand, productivity
improvement, expected sales, range of estimates, and likely profits. It is claimed that a company

should still have a profitability target in mind, which will regulate other aspects of the economy
such as revenues, acquisitions, and expenditures. It would have to be determined how many sales
are required to achieve the profitability. Without a question, desire for the goods will be
evaluated in order to forecast sales volume. As a result, sales volume must be thoroughly
defined, as it is, to a large degree, the determining element in the development's profitability
(Mabrouk, Omri and Jarraya, 2020).
The strategic study enables for a top-down view of Lindt & Sprungli, with the strategic
element being identified first. The specified structure will next be used to determine the aims and
features of the business strategy and placement for competitive edge. The corporate assessment,
Porter's five forces, key successful elements, and Porter's generic approaches will all be included
in the competitive strategy.
Lindt & Sprungli has established itself to be exceptionally successful and has seen the
potential for expansion. They've had good results with their company concept, and they've made
a lot of money. In the years ahead, the firm is seeking forward more too fresh expansion plan that
will keep them at the forefront of their industry. "The prices of Lindt & Sprüngli enrolled stocks
and involvement certifications considerably outpaced the SMI growth rate (+ 9.5%), with yearly
gains of 18.8 percent and 22.7 percent, correspondingly, showing shareholders' trust in our
company." The company's plan was successful, as evidenced by its ordinary capital. All strategy,
managerial, and line manager fall to the Executive board. The operational level tasks are handled
by the CEO and group management, with assistance from expanded team management (Yu,
Zhang and Huo, 2021).
CONCLUSION
As per the above report it has been concluded that International finance is the study of
financial ties among multiple nations. International finance covers subjects such as foreign direct
investment and currency fluctuations in the financial system. As a consequence of enhanced
globalization, banking industry has become more important.

REFERENCES
Books and Journal
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construction supply chain management: a systematic review. International Journal of
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Huang, S., Potter, A. and Eyers, D., 2020. Social media in operations and supply chain
management: State-of-the-Art and research directions. International Journal of
Production Research. 58(6). pp.1893-1925.
Hackius, N. and Petersen, M., 2020. Translating high hopes into tangible benefits: How
incumbents in supply chain and logistics approach blockchain. IEEE access. 8. pp.34993-
35003.
Wamba, S. F., 2020. Humanitarian supply chain: A bibliometric analysis and future research
directions. Annals of Operations Research, pp.1-27.
Firmansyah, M. A. and Maemunah, S., 2021. Lean Management and Green Supply Chain
Management Implementation on the Manufacturing and Logistics Industry at an
Indonesia. Business and Entrepreneurial Review. 21(1). pp.11-22.
Wang, C. N. and et.al, 2021. A compromised decision-making approach to third-party logistics
selection in sustainable supply chain using fuzzy AHP and fuzzy VIKOR
methods. Mathematics. 9(8). p.886.
Taschner, A. and Charifzadeh, M., 2020. Supply Chains, Supply Chain Management and
Management Accounting. In Management Accounting in Supply Chains (pp. 1-14).
Springer Gabler, Wiesbaden.
Mabrouk, N., Omri, A. and Jarraya, B., 2020. Factors influencing the performance of supply
chain management in Saudi SMEs. Uncertain Supply Chain Management. 8(3). pp.569-
578.
Yu, Y., Zhang, M. and Huo, B., 2021. The impact of relational capital on green supply chain
management and financial performance. Production Planning & Control. 32(10). pp.861-
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Online
Historical and future dividends. 2021. [Online]. Available through;
<https://finance.yahoo.com/news/buy-chocoladefabriken-lindt-spr-ngli-123932585.html>
Historic dividend. 2021. [Online]. Available through; <https://simplywall.st/stocks/ch/food-
beverage-tobacco/vtx-lisn/chocoladefabriken-lindt-sprungli-shares/news/read-this-before-
buying-chocoladefabriken-lindt-sprngli-ag-v>