International Finance Assignment : Burberry Group Plc

International Finance

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Recent developments in international financial environment: ...................................................1
TASK 2............................................................................................................................................2
Source of finance:.......................................................................................................................2
Dividend policy: .........................................................................................................................3
TASK 3............................................................................................................................................4
Financial performance analysis:..................................................................................................4
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In any business environment, there is a need to integrate a nation or location specific
financial standards with international financial standards for growth perspectivev (Armijo and
Echeverri-Gent, 2014). In recent business environment, there are vast changes in the field of
international finance and hence, there is a requirement of competent management in an
organisation to cope up with such changes taking place in the environment. For better
understanding of international finance, an organisation named Burberry Group Plc is chosen.
This report is divided in three task, first task provides the details about the recent developments
in the international market. Second task describes the sources of funds and related matters
whereas third task tells about the financial performance of selected organisation.
TASK 1
Recent developments in international financial environment:
There are various developments taking places in the business environment related to
finance which has a tremendous impact on the business operations of Burberry Group Plc. For
understanding of these developments, firstly the term international financial should be
understood. International Finance means monetary interactions with two more countries for
doing business. It is concerned with economies as a whole instead of individual market of a
country. There are various institution which provides international finance for doing business
such as international monetary fund (IMF) and international finance corp. (IFC) etc. Details of
two recent developments among various developments are as follows:
 Due to globalisation and rapid integration of financial markets, the geographical locations
are no more cause for obtaining finance from outside the domestic market for
diversification. Due to this, international financial market is getting smaller in every
aspect of business. It can affect the Burberry Group Plc in near future because these
developments provides more growth opportunities to the company.
 The other development in this environment is existence of universal banking and as a
result, there is a active flow of international capital. There is also improvement in the
working of non banking financial institution in supporting business operations of various
organisations. Due to this it has a wide range of sources in near future for diversification
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of its business operations in other countries by taking loans in that country easily (Bishop
and Hill, 2014).
TASK 2
Source of finance:
In any organisation like Burberry Group Plc, for carrying out its business operations
effectively and efficiently, there is a need of finance to provide monetary assistance to its
business operations and for working capital requirements. There are various sources of finance
from where a company may take finance which are as follows:
 Long term finance
 Medium term finance
 Short term finance
Long term finance:
These are those finance which are taken by the company for long term period generally
for more than 5 years. This is taken for financing capital expenditures like purchase of fixed
assets, land and building etc. long term financing sources can in the form of followings:
 Share capital or equity shares: In this method, companies like Burberry Group Plc are
often gives a prescribed number of shares to general public (in case of public
company) or to some specified person (in case of private company) and takes the
money form such persons in lieu of shares given.
 Retained earnings: In this method, company often retained its earning by not
distributing to shareholders (by way of dividend) and use this retained earning in
funding of its capital projects (Buchner and others, 2014).
 Debenture/bonds: This method for obtaining fund is used when company wants to use
debt source of finance. In this method, the person who is given finance to company is
entitled to receive an income at fixed periodical intervals at fixed rate.
Medium term finance:
These are those finance which are taken by the company for medium term period which
is for 3 to 5 years. This include the followings:
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