International financial management: BHP

Essay by lindsay06University, Master'sC+, November 2014

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International Financial Management


The management of a business organization is mandated with the responsibility of ensuring that the business organization adopts the necessary management practices in order to achieve increased performance. In the cause of business activities, business organizations come across different risks including financial risks. The financial risks in a business organization are those risks that are likely to affect and reduce the financial stability of a business organization. This means that the business organization experiences losses due to poor management of the financial risks. According to Belmont (2012), to minimize and eliminate financial risks in a business organization, there is a need for business organizations to adopt different financial risks management practices that should be implemented in the business organization. Hence, financial risks management is the practice and procedures that are adopted by the people in management positions of business organization to optimize the different risks involved in handling financial interests.

It includes the guidelines and policies that are developed and implemented in a business organization to accept the financial risks in the company. There are different financial management tools that are adopted by different business organization so as to manage financial risks. The essays analyze the different financial risks management tools used in BHP Company and compared the tools with a rival company Rio-Tinto Company and determine whether there is a need for improvement in the way BHP Company manages its financial risks.

According to BHP Billiton (2013), the BHP Company is a business organization based in Australia. In managing its financial risks, the BHP Company has developed and employed a policy called as the Portfolio Risk management Strategy that is based on managing exposures and financial risks that include the interest rates, movement of currencies, and prices of different...