Facebook @Dethivaonganhang www facebook com/dethivaonganhang TABLE OF CONTENTS TABLE OF ABBREVIATIONS i TABLE OF FIGURES ii EXECUTIVE SUMMARY iii INTRODUCTION 1 1 Introduction of the research topic 1[.]
Facebook: @Dethivaonganhang www.facebook.com/dethivaonganhang TABLE OF CONTENTS TABLE OF ABBREVIATIONS i TABLE OF FIGURES ii EXECUTIVE SUMMARY iii INTRODUCTION 1 Introduction of the research topic Purpose and scope of the research Research questions Methodology CHAPTER 1: INTRODUCTION 1.1 An overview of COMA-IMEX 1.1.1 History and development of COMA-IMEX 1.1.2 Functions and missions 1.1.3 Organizational structure 1.2 Overview of risk management in international payment at COMA-IMEX 1.2.1 International payment reality in recent years 1.2.2 Reality of risks at COMA-IMEX CHAPTER 2: THEORETICAL FRAMEWORK 2.1 Key terms and definitions 2.1.1 International payment 2.1.2 Risks 2.1.3 Risks in international payment 2.2 Commercial risks 2.2.1 Risks to sellers 10 2.2.2 Risks to buyers 10 2.3 Risks in payment (financial risks) 12 2.3.1 Credit risk 13 2.3.2 Country risk 13 2.3.3 Legislative risk 15 Facebook: @Dethivaonganhang www.facebook.com/dethivaonganhang 2.3.4 Foreign exchange risk 15 2.3.5 Interest rate risk 16 2.3.6 Risk of selecting unsuitable conditions while negotiating international payment terms 18 CHAPTER 3: FINDINGS AND ANALYSIS 19 3.1 Business results in recent years 19 3.1.1 Reality of financial general status and business operation at COMAIMEX 19 3.1.2 Overall assessment of COMA-IMEX’s real situation of international payment 21 3.2 Reality of risk management at COMA-IMEX 24 3.2.1 Types of risks which COMA-IMEX often faced with 24 3.2.2 Preventive solutions to risks which have been used so far at COMAIMEX 27 3.3 Overall assessment of risk management in international payments 29 3.3.1 Achievements 29 3.3.2 Failures 30 CHAPTER 4: RECOMMENDATION 31 4.1 Suitable methods of payment 31 4.2 Suitable currency in payment 31 4.3 Payment methods diversification 32 4.4 Choosing partners 32 4.5 Human resources 33 4.6 Relationship with banks 34 4.7 Selecting and negotiating import/export contract conditions 35 4.8 Strengthening COMA-IMEX’s business and position 35 4.9 Others 36 CONCLUSION 37 REFERENCES Facebook: @Dethivaonganhang www.facebook.com/dethivaonganhang TABLE OF ABBREVIATIONS COMA-IMEX Construction Machinery Corporation – Import Export Centre L/C Letter of Credit Incoterms International Commercial terms UCP The Uniform Customs and Practice for documentary credits WTO World Trade Oganization ISBP International Standard Banking Practice E/R Earning/Revenue T/T Telegraphic Transfer D/P Documents against payment D/A Documents against acceptance CIF Cost & Insurance & Freight i Facebook: @Dethivaonganhang www.facebook.com/dethivaonganhang TABLE OF FIGURES Table – Business statistics at COMA-IMEX from 2009-2011 19 Chart - Main sources of revenue at COMA IMEX (2009-2011) 21 Table – Prime cost in USD and JPY (2009-2010) 22 Table – E/R percentage of COMA-IMEX from 2009-2011 22 Chart - Percentage of Sales from import/export 23 ii Facebook: @Dethivaonganhang www.facebook.com/dethivaonganhang EXECUTIVE SUMMARY International payment nowadays is very important yet risky Risk management is issue which managers pay much attention to, especially managers of import-export firms The purpose of this study is to detemine the financial risks and commercial risks which COMA-IMEX, an import-export enterprise now facing with and what feasible solutions COMA-IMEX should take to solve them The report is divided into four chapters In chapter 1, the researchers give a brief presentation on the establishment and development of Construction Machinery Import Export Center (COMA-IMEX) and introduction about their functions, missions and the company’s structure In additions, there are overview of risk management at COMA-IMEX in recent years In chapter 2, the researchers present theoretical framework which is supported to the report This chapter covers key terms and definitions of risk management, types and classification of risks, etc Then, in chapter 3, by doing research of financial status and business statement of COMA-IMEX, the researchers gives comments on reality of import/export business at COMA-IMEX as well as COMA-IMEX’s achievement and failures Finally, in chapter 4, the researchers makes some recommendations to strengthen risk management at COMA-IMEX iii