Yes, it is. There are many issues which involve aspects
like changing rates of interest, exchange change variations, among many others that are
involved in international working capital management but do not play that large a role
in domestic working capital management.
Working capital
refers to the funds available with a company to pay for various costs like interest
payments on funds that been borrowed, wages to employees, and other costs involved in
the operations of the company.
In international working
capital management, if a company has borrowed funds from international lenders in a
foreign currency and the currency of the country in which the company is based
depreciates, the interest expenses of the company goes up. So does the cost of raw
material that the company may have to import. On the other hand, a subsidiary which
receives funds for its working capital from the parent company based in another country
would be able to receive the same funds though the outflow for the parent company would
be smaller.
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