Furs clothing: multinational financial management

Furs, a clothing company incorporated in 1973 that soon became an international brand, recording double digit growth in profits for more than a decade under the leadership of Isabella Johnson had hit a snag.Increasing expenditure and intense competition stifled the company’s earnings which eventually culminated in Furs’ Board of Directors deciding to replace Isabella with Rob Stuarts as the new CEO.The Board upon appointing Albert as Furs’ new CFO charged him with making key decisions set to restore the company’s fortunes. As part of plans to firmly place Furs on the path to growth, management had decided to borrow USD500 million from banks to finance the company’s operations which Albert had to arrange, justifying to the board the ideal currency to undertake the transaction in given the prevailing circumstances. Furs also has USD50 million in its coffers which will be needed in the next 3 months but available for immediate investment in short-term securities. The company had also purchased new machinery to reduce costs and increase efficiency, which required a payout of JPY625 million in the next 6 months. Albert is currently considering proposing to the Board the right mix of derivative instruments as well as other investment options, which will minimize financial risks and costs whiles maximizing the company’s returns. Albert’s proposal is indeed crucial as it will also influence the decision to admit him onto the Board of Directors.