The UK hardwood industry and Global Furniture Corporation Essay

The UK hardwood industry and Global article of furniture Corporation - Essay ExampleIn the year 2010, the companies in UK had imported 5.7 million cubic meters of sawnwood and had produced only 3.1 million cubic meters of sawnwood (Forestry Commission, 2011). Global Furniture Corporation (GFC) which is a 200 year old follow is situated in UK and still the Great Compromiser one of the leading hardwood processing companies of the country. The longevity of the association determines the alliances efficiency and effective pick utilization capacity. There were various contributing factors to the success of the association which are loyalty of the employees, high choice products, efficient supply chain and forethought. GFC has been able to adapt to the changing marketing trends and technological developments. The flexibility of the company to adapt to the internal and external changes is one of the key reasons for the success of the company. The company imports hardwood from S bulg eh American and Asian countries and processes the hardwood into finished products like Hardwood flooring, panelling and decorative strip wood. GFC also owns a subsidiary company know as Real Furniture Company (RFC) which processes imported hardwood into readymade furniture meant for domestic purposes. The operations of RFC are carried out in the overseas locations of the company. Answer 1 The practice of financial management concepts varies from company to company. Financial management helps the managers of the company to formulate various financial strategies for effective utilization of funds. Financial management decisions include investment, dividend and pay decisions (Brigham, 1985). GFC has also adopted various accounting and financial practices over the years. Currently, the company follows the new accounting regulations and principles. GFC pays the provider of the company in the home currency of the company which is British pounds. The sales is converted into British pounds and therefore deposited into the companys UK bank account. The fluctuations in the home currency are of paramount importance to the GFC and new(prenominal) companies who import most of the raw materials from abroad. For example if the home currency of GFC appreciates against the suppliers home currency then GFC forget gain however, if the home currency of GFC depreciates against the suppliers home currency then GFC will bear losses (Conklin, 2006). This is because to a lower place the appreciation of the home currency, GFC has to pay fewer units of its home currency to buy the equivalent amount of inputs in foreign currency. Problem arises when the home currency of GFC depreciates then the company has to pay excessive amount of money against the suppliers home currency units. The cost management issues also depend on the relationship between the suppliers and the company. If the suppliers of the company share a long term and stable relationship with the company then the ability of the company to insulate its cost from the impact of the currency movements will be high or vice versa. This indicates that the companys ability to reduce losses while the companys home currency depreciates depends upon the disposition of contracting with its suppliers (Conklin, 2006). Therefore, one can say that currently GFC is not following a very possible approach it should adopt a flexible approach which can help the