The Account Receivable Financing Modes Selection Of Multinational In The International Trades In Risk Management Perspective

With the development of economic globalization and fierce competition in international markets, multinational corporations are playing an increasingly important role in the world economy. Meanwhile, increasing competition in the international market makes the buyer’s market which is characterized by the world trade pattern has been basically formed, credit sale and other sellers of credit have become the mainstream of international settlement. In this case, a large number of accounts receivable’s emergence is inevitable. Receivables which take a lot of money affected the turnover rate of working capital and increased the enterprise’s operational risk to a certain extent. On the other hand, with the deepening of financial markets and innovation of financial instruments, more and more companies choose to use accounts receivable financing.By the way of accounts receivable financing, an enterprise use the receivables that formed by the credit receivables to get the necessary funds through a special finance institutions. With the purposes of solve the lack of fund to strength liquidity. In recent years, accounts receivable financing has developed rapidly.There are three basic Accounts receivable financing choices:accounts receivable pledge financing, Accounts receivable for allocation and accounts receivable securitization. Each of them can generate cash for firm, while different mode of financing applied to different situations as well as different costs. Compared to ordinary enterprises Multinational companies faced with more uncertainty factors which play varying effects on the choosing of specific financing way.To enable multinational companies to carry out the accounts receivable financing more economical and effective, the author discusses this issue for multinational companies on how to select the most appropriate accounts receivable financing model under different circumstances. First of all, specifically elaborates the three multinational accounts receivable financing modes and the characteristics of operating, risk transfer, applying to the enterprises in the respective processes; Second, from the reality of multinationals, analyses the three kinds of risk multinationals may encounter in the process of conducting cross-border business, namely the credit management risk, exchange rate risk, internal coordination of risk.And the influences may play on the choice of special financing ways. On this basis, the author summarized four typical risk combinations the multinational companies may met during operating, and by comparing the cost and income of each mode under different risk combinations to get the appropriate choice. Combined with the above theoretical analysis, the author leads to the case of the multinational company’s H. From a financial point of view, analyses expected financial results of different choices. Through the combination of theory and practice, he author thinks that multinational company should choose suitable financing mode on the consideration of their own specific situation, compared the cost with the profit as well as avoid financing risk during operating.