International Finance and Law

Running head: INTERNATIONAL FINANCE AND LAW
International Finance and Law
Name of the Student:
Name of the University:
Author’s Note:

1INTERNATIONAL FINANCE AND LAW
Table of Contents
Key International Trade and Finance Principle:..............................................................................2
Increase in Export thereby increase in profit:..............................................................................2
International Trade Financing:....................................................................................................2
Financial Instruments to facilitate foreign trade:.............................................................................2
Typical foreign trade transaction involved:.....................................................................................3
Recommended International financing strategy for the company:..................................................4
References and bibliography:..........................................................................................................5

2INTERNATIONAL FINANCE AND LAW
Key International Trade and Finance Principle:
International trade or business involves transactions cross the geographical border of a
country. In the given case study of Fashion Pvt. Ltd, the company is planning to purchase some
machinery from Germany. Their trade practice is based on letter of credit, which allows a 180
days credit period to the buyers. They are also planning to extend their export to various new
international markets, which needs additional working capital. To meet the capital need for
purchase of machinery and working capital for lag in collection from accounts receivable, they
need to raise funds. Analysing all this aspects, key international trade practices can be outlined as
follows.
Increase in Export thereby increase in profit:
They are having a projected increase in their sales for the current year, and it will
increase their volume of business considerably. As they are having a well growth and
performance experience in the past, their target of 40% growth is justifiable. They just need to
finance the working capital to achieve that target.
International Trade Financing:
The most important point in this case study is the financing of capital for the machinery
purchase and working capital requirement. There are various ways of international trade finking
to meet their capital needs. They need to select one of the optimum options for financing their
capital requirements.