Financial risk management.
Entrepreneurship has the main goal -get the maximum income and at the same time incur minimal capital outlays, and in conditions of always competitive struggle. But in order to realize this goal, it is necessary to compare the size of the investments with the financial performance of the activity.
One must always be prepared for the fact that by exercisingany economic activity, there is always a risk (danger) of losses, and their volume, as a rule, is determined by the specifics of this or that type of business. So, the risk is the probability of occurrence of losses, losses, shortfall in profits or planned revenues.
The financial manager considers the risk a probabilityan unfavorable outcome. Therefore, a financial risk management system should be established at the enterprise. The risk may or may not occur. In any case, the result will be either a loss, a loss, a loss, or a zero result will be obtained, or it will be profit, profit, gain. Experts believe that without taking risks, business can not be successful. Therefore, the management of financial risks becomes particularly important.
Financial risk management isuse of various measures to predict the occurrence of a risk situation to some extent and immediately take measures to reduce the risk. Whether financial risk management will be effective is often determined by their classification. We are talking about the distribution of risks for individual groups on different grounds. Classification, which is scientifically justified, allows to increase the effectiveness and make the management of financial risks of the organization more effective.
As far as possible, the risks are divided intospeculative and clean. Clean - this is an opportunity to get a zero or a negative result. These include environmental, natural-natural, transport, political and some commercial (trade, production, property). Speculative risks are an opportunity to get not only a negative but also a positive result.
The causes of financial risks are inflationaryfactors. In addition, if the bank's discount rates are raised or the value of securities is reduced, financial risks may also arise. They are divided into two groups: some of them are related to the purchasing power of money, while others are related to the investment of capital. The first group is deflationary and inflationary risks, liquidity risk, currency risks. The second group is risk, loss of profits, direct financial losses and a decrease in yield.
In order to effectively managefinancial risks, it is necessary to be able to correctly assess their magnitude and degree of manifestation. The degree of risk is the probability that a loss event will occur. The risk is acceptable, that is, there is simply a threat of almost total loss of profit due to the implementation of the project that was planned. Critical risk is a risk that may result in non-receipt of proceeds, and losses will be covered by a specific entrepreneur. Catastrophic risk threatens loss of property, capital and bankruptcy in general. Evaluation of financial risks is not an easy task, it requires great knowledge and experience.
Financial risk management is a mechanism,consisting of a special strategy and various methods of financial management. Its ultimate goal is to receive the greatest profit, provided that an acceptable, optimal for the entrepreneur ratio of risk and profit. The object of financial risk management is risk, a variety of risky capital investments, as well as all economic relations of economic entities during the implementation of risk. The subject of management is a special group of people (an insurance specialist, a financial manager, an acquirer and others). They use different methods and techniques to influence the control object.