International financial management is not a separate set of issues from domestic or traditional financial management, but does involve a number of risks and complexities not confronted domestically. International financial management means that all the standard financial activities and decisions within a firm (capital budgeting, capital structure, raising long-term capital, working capital and cash flow management, etc.) will be complicated by the differences in markets, laws and especially currencies of conducting business internationally. This management requires many different activities from those of traditional domestic financial management practices. An added distinction in this area of management is that between a firm which only imports and exports, an international firm, and a firm which not only conducts direct import/export business but also possesses foreign affiliate and subsidiary operations, a multinational firm (sometimes referred to as multi-domestic and transnational).

International financial management requires knowledge of a number of different markets and institutions. These include currency markets, along with a knowledge of exchange rate determination and terminology; international money and capital markets; and international debt and equity markets. International financial management activities in turn include international capital budgeting, managing international capital structure, working capita management and performance evaluation and control.