scholarly journals WAYS TO MINIMIZE THE ORGANIZATION'S FINANCIAL RISKS

2020 ◽  
pp. 81-88
Author(s):  
L. A. Semina
Keyword(s):  
Financial Risk ◽  
High Growth ◽  
Economic Security ◽  
Financial Risks ◽  
Complete Protection ◽  
Economic Activities ◽  
Stable Conditions ◽  
Market Instability ◽  
The Impact ◽  
Further Development

The specificity of the article is an attempt to establish the General principles of building a financial risk management system in an organization aimed at minimizing them. Market instability, inaccuracy and incompleteness of information about the conditions associated with the conduct of business and the implementation of planned decisions, leads to certain losses for the organization, and in some cases, to additional benefits. The impact of financial risks on the economic activities of modern organizations is multifaceted and can not only reduce revenue and profit indicators, but also lead to bankruptcy of the organization, weaken economic security. Based on the foregoing, we can confidently say that management and employees of the modern organizations face the task of timely identification of financial risks and minimization of their impact on the level of economic security organization, which, in turn, is expressed in this condition organization, which can be achieved fairly stable and high growth of its economic indicators, but also guarantee complete protection from external and internal threats that undermine the welfare and further development of the organization. In other words, economic security is aimed at ensuring the most efficient allocation of resources and creating stable conditions for the operation of production and profit.

Financial Risks of the Bank: Assessment and Mechanism of Neutralization

2020 ◽  
Vol 22 (1) ◽  
pp. 6-12
Author(s):  
Nelia Volkova ◽  
◽  
Alina Mukhina ◽  
Keyword(s):  
Risk Assessment ◽  
Financial Stability ◽  
Financial Risk ◽  
Stable Operation ◽  
Financial Risks ◽  
Negative Consequences ◽  
Conceptual Approach ◽  
Relevant Today ◽  
Banking Institution ◽  
The Impact

Abstract. Introduction. The issue of financial risk management of commercial banks is quite relevant today, because the activity of banks is the most risky of all. The presence of risks in banking can lead to unexpected losses, namely the loss of own resources. That’s why for the stable operation of the bank without loss the priority is to assess the financial risks, which is the basis for their further neutralization. Purpose. The purpose of the article is to develop conceptual provisions for assessment financial risks and justifying the need to neutralize them. Results. The article analyzes the impact of risks on the financial stability of a banking institution. The main methods of bank risk assessment are considered. All these include the statistical method, the analytical method, the expert method, the analogue method and the combined method. The necessity of neutralization of financial risks in order to avoid negative consequences is substantiated. Also the methods of bank risks neutralization are considered. It should be noted that these methods of neutralization can not only be used, but also supplement the list with new methods must be done, which in the future will protect the bank from the influence of undesirable factors. A conceptual approach to the assessment and neutralization of financial risks is proposed. This conceptual approach aims to ensure effective assessment of the level of risk with their subsequent neutralization Conclusions. Use of a conceptual approach will allow an effective risk assessment and decision-making to avoid or accept risk. Thanks to using this approach, the banking institution will be able to react swiftly to the presence of financial risks and to prevent the occurrence of negative consequences, which may lead to a violation of the financial stability of the bank.

scholarly journals PARAMETRIZATION OF THE MECHANISM OF FINANCIAL RISK MANAGEMENT IN THE DIGITAL SECURITIES CIRCULATION

2019 ◽  
pp. 77-83
Author(s):  
Oleksandr Volodmyrovych Lutskevych ◽  
Keyword(s):  
Risk Management ◽  
Social Life ◽  
Financial Risk ◽  
State Regulation ◽  
Securities Market ◽  
Financial Risks ◽  
Negative Consequences ◽  
Management Mechanism ◽  
Financial Risk Management ◽  
The Impact

Urgency of the research. Digital technologies are transforming all spheres of social life, and the financial sphere is no exception. In general, such trends cannot but leave an imprint on approaches to managing the financial risk of digital securities. Target setting. Currently, scientific and methodological support for the formation of a mechanism for managing the financial risks of digital securities is in the early stages of development, while the quality of state regulation and supervision of participants in digital securities directly depends on the effectiveness of the current mechanism for managing such risks. Actual scientific researches and issues analysis. Theoretical and applied aspects of the securities market, features of the impact of financial innovations and financial risk management in the field of securities circulation, are researched by V. Bodrov [1], O. M. Kovaleva [2], I. V. Krasnova [3], N. V. Tkachenko [4], Yu. B. Kolupaeva [5] and others. Uninvestigated parts of general matters defining. The methodology of formation the mechanism for managing the financial risks of digital securities needs more precise research. The research objective. Deepening the scientific understanding of the term "financial risk management mechanism for the circulation of digital securities" will ensure to outline ways of increasing the efficiency of this financial instrument usage. The statement of basic materials. This article analyzes the essence of the term "financial risk management mechanism". The construction of the mechanism has been adapted to the specifics of digital securities risk management. Conclusions. The essence of the mechanism of financial risks management of digital securities circulation is improved due to application of a set of methods for identification, quantitative and qualitative analysis, measures to prevent realization and / or reduction of negative consequences of financial risks of digital securities circulation, ways of control over some events.

scholarly journals Impact of relative and absolute financial risks on share prices: a Zimbabwe Stock Exchange perspective

2020 ◽  
Vol 17 (1) ◽  
pp. 1-14
Author(s):  
Atanas Sixpence ◽  
Olufemi P. Adeyeye ◽  
Rajendra Rajaram
Keyword(s):  
Financial Risk ◽  
Stock Exchange ◽  
Accounting Standards ◽  
Low Risk ◽  
Equity Valuation ◽  
Risk Category ◽  
Financial Risks ◽  
Share Prices ◽  
Equity Ratio ◽  
The Impact

The impact of financial risks on share prices concerns investors, company executives and accounting standards developers. Investors need this information in delineating their equity valuation models while company executives need the information to make appropriate capital structure decisions. Accounting standards developers use this information in their policy to make accounting standards contemporary. The authors examine the link between relative and absolute financial risks and share prices using a dynamic panel of non-financial listed companies on the Zimbabwe Stock Exchange after dollarization. Equity investors incurred losses before dollarization, which prompted this investigation into the sphere of financial risks in order to explain share price movements so that investors can use it to minimize losses in the future. Absolute financial risk is measured by the total debt, while debt/equity ratio measures relative financial risk. Market capitalization as a proxy for equity and debt is measured by total liabilities. An average debt/equity ratio greater or equal to one qualifies a firm into the high-risk category while ratios below one imply low-risk firms. Results from two-step System Generalised Method of Moments (GMM) show negative and significant connection between relative risk and share prices across risk categories. The impact of absolute risk on share prices differs by risk category. Firm managers are advised to keep total liabilities below market capitalization in order to enjoy the benefits of low-risk categorization. Debt ratio is a reasonable indicator of value and investors can use it in equity valuation. Mandatory reporting of debt ratios should be considered by accounting standards developers.

scholarly journals ECONOMIC INTEREST OF AN ENTERPRISE IN ECONOMIC SECURITY CONCEPT

2021 ◽  
Vol 137 (3) ◽  
pp. 107-116
Author(s):  
BOGMA Olena ◽  
SILAKOVA Hanna
Keyword(s):  
Economic System ◽  
Economic Security ◽  
Economic Interest ◽  
Economic Activities ◽  
Economic Interests ◽  
Dual Nature ◽  
Theoretical Substantiation ◽  
Economic Needs ◽  
Definition Of ◽  
The Impact

Background. Ensuring the necessary and sufficient level of economic security is one of the most important issues for any enterprise. The conceptual bases of the theory of eco­nomic safety of the enterprise defines the strategy, tactics and mechanism of its maintenance, so it is very important to understand the essence of "economic interest" concept. The aim of the article is to clarify the content of the "economic interest of the enter­prise" concept and systematize the main essential characteristics of the definition. Materials and мethods. The questions of theoretical substantiation of the research object are based on general and special methods of cognition such as historical, abstract-logical and comparative. Methods of analysis and synthesis, analogies, system approach are used as a concept to determine the essential characteristics of the definition of"eco­nomic interest of the enterprise". Method of theoretical generalization and formulation of deductions have been used to draw conclusions. Results. Studies of the terminological principles of determining the economic inte­rest of the enterprise have established a large number of scientists’ opinions on the content of this concept. They are grouped into five main approaches – the appropriate goal; certain material (non-material) good; the need or system of needs of the entity; expression of rela­tions between the respective subjects; motivation and stimulus of the subject. Therefore, it is proposed to consider the economic interests of the enterprise, based on the awareness of their carriers of their own economic needs. The study clarified the main essential cha­racteristics of "economic interest of the enterprise" the concept, which includes the fact that economic interests are a form of manifestation of economic needs; personalized and sub­jec­tive nature of economic interests; focus on obtaining various benefits; awareness of the impact of media on the economic system and economic processes; dual nature of economic interests. Conclusion. We clarified the definition of economic interests of the enterprise. It is proposed to consider the concept as the perceived needs of their carriers, which can be met through economic activities and encourage them to influence directly or indirectly the com­ponents of the domestic economic system in order to obtain certain benefits.

scholarly journals Toolset for financial risk strategic assessment in corporations based on stochastic modeling

2020 ◽  
Vol 9 (28) ◽  
pp. 451-464
Author(s):  
Viktoriya Manuylenko ◽  
Denis Ryzin ◽  
Natalia Gryzunova ◽  
Olga Bigday ◽  
Olga Mandrytsa
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Financial Risk ◽  
Assessment Model ◽  
Financial Risks ◽  
Financial Leverage ◽  
Financial Risk Management ◽  
Environment Factors ◽  
Target Values ◽  
The Impact

The study substantiates the need to develop and test a model for assessment of strategic financial risk level in corporations. It implies modeling for two indicators: relative (financial leverage) and absolute (external capital of indicators). The model should also take into account influence of emergent environment factors and most stakeholder groups’ interests when building scenarios for their behaviors in the financial markets –Implementation of the model allows establishing financial risk target values considering deviation calculations between the indicators’ modeled and actual values simultaneously determining both tactical and strategic guidelines for Financial Risk Management Policy in corporations, which should involve stakeholders into financial risk-taking process. The model implementation also should be the basis for development and improvement of risk-based forecasting tools, business planning and stress testing. The toolkit for assessing level of current and strategic financial risks in corporations based on simulation modeling was developed and implemented with attraction of general scientific and special methods. Direct results of the study are as follows: in theoretical block of the research – essentially, main attributes of financial risks classification for corporations are identified; they are recognized by time as retrospective, current and strategic financial risks, and correct classification of the latter allows their identification, evaluation and regulation; in practical block of the research – evaluation of financial risk in corporations reveals that the risk apart from other internal factors is highly affected by the level of financial leverage, where its high value increases financial risk; still, corporations do not take into account the influence of environmental factors on its level; the role of tax risk as a part of financial risk is not significant, still it is unfortunate that the Russian legislation system allows double taxation on income tax in the form of dividends, and dividend policy of Russian corporations is unstable; in methodological block of the research –financial risk assessment model for corporations was developed and tested on a platform of a special new software product that determines the target level of financial risk; the model differs from standard approaches to financial risk assessment as it carries strategic forecasting nature and takes into account the impact of emergent environment factors; thus it promotes new areas in strategic financial risk management.

scholarly journals Determining Economic Security of a Business Based on Valuation of Intangible Assets according to the International Valuation Standards (IVS)

Risks ◽  
2020 ◽  
Vol 8 (4) ◽  
pp. 110
Author(s):  
Dmitrii Rodionov ◽  
Olesya Perepechko ◽  
Olga Nadezhina
Keyword(s):  
Intellectual Property ◽  
Regression Model ◽  
Intangible Assets ◽  
Economic Security ◽  
Suggested Algorithm ◽  
Know How ◽  
Strategic Goals ◽  
The Impact ◽  
Further Development ◽  
A Company

This work considered the economic security of an enterprise with regard to the valuation of intangible assets according to the International Valuation Standards (IVS). This study is essential due to a growing number of companies with intangible assets (trademarks, patents, know-how, etc.) as their main value. This study included analysis of the impact created by the value of intangible assets and intellectual property on company capitalization and economic security plus a regression model. An algorithm was developed to determine the economic security of a business based on the valuation of intangible assets according to the IVS. The suggested algorithm can allow a company to manage its intangible assets effectively using the IVS, which, in turn, will provide the required level of economic security for further development and achievement of strategic goals by the business entity.

scholarly journals Financial Risks in the Conditions of Unstable Market Economy

2021 ◽  
Vol 10 (1) ◽  
pp. 432
Author(s):  
Ellina Pakhucha ◽  
Iryna Sievidova ◽  
Iryna Siadrysta ◽  
Leonid Mohilevsky ◽  
Tamila Oliynik ◽  
...  
Keyword(s):  
Financial Market ◽  
Financial Stability ◽  
Financial Risk ◽  
Cumulative Risk ◽  
Constant Factor ◽  
Small Enterprises ◽  
Financial Risks ◽  
Economic Activities ◽  
Medium And Small Enterprises ◽  
Final Block

The necessity and significance of financial risks, which are a constant factor in the activity of any enterprise, are substantiated. It is established that for a broader understanding of the essence of financial risk it is necessary to consider it as a cumulative risk of the enterprise. The growing impact of financial risks on the results of financial and economic activities is associated with the uncertain economic situation, the instability of financial market conditions, the rapid introduction of new financial technologies and financial instruments, expanding the scope of financial relations of the enterprise. A system of financial ratios has been formed to quantify the risk of enterprises of different sizes, namely for large, medium and small enterprises, which most accurately reflect the current financial situation. Has been proven that the growing pressure of the crisis and insecurity on the part of the state will lead to the transition from the crisis in which enterprises are today, to a state of economic bankruptcy. It is established that the first place among the blocks of financial coefficients of risk assessment of enterprises is occupied by the block of business activity, then the block of profitability indicators, the block of liquidity indicators, the final block of capital structure. For each of the defined blocks the directions of increase, or optimization that will provide financial stability of the enterprise are presented.

scholarly journals The Impact of External Risks on Ensuring the Financial and Economic Security of the Russian Federation

2020 ◽  
Vol 16 (2) ◽  
pp. 68-75
Author(s):  
E. M. Aminova
Keyword(s):  
Russian Federation ◽  
Legal Regulation ◽  
Economic Security ◽  
The State ◽  
Financial Risks ◽  
Forming Process ◽  
Legal Method ◽  
Russian State ◽  
The Russian Federation ◽  
The Impact

Introduction. The article discusses the impact of financial risks on the financial and economic security of the state. In modern economies, the financial sector dominates the economy. Moreover, the development of financial markets has been seen in the past two decades as an independent driver of economic growth. At the same time, “negative processes that occur in a small number of financial market players in one country can cause crisis events throughout the world economy.” Among the main strategic risks and threats to national security in the economic sphere are the low stability and security of the national financial system.Materials and methods. The work uses the following general scientific and special methods of cognition: the method of system-structural analysis, synthesis, induction, deduction, comparative-legal and formal-legal method.Results. As the experience of the last decade shows, the financial and economic security of the Russian state is more influenced by the environmental factors (general economic crisis, geopolitical situation, inflation, payment crisis, climate and biological (epidemiological) risks, etc. The state governance  of ensuring financial and economic security should be a permanent, integrated part of the forming process of state economic policy and legal regulation of russian economy. In order to achieve financial and economic security it is necessary to establish an effective financial and legal mechanism capable to resist emerging risks.Discussion and conclusion. The article revealed the impact of external financial risks that have a significant impact on the financial and economic security of the state. The need to establish an effective state mechanism to ensure the financial security of the Russian Federation is justified. The proposed measures are directed to improve the legal provision of financial and economic security of the Russian Federation. 

scholarly journals Features of application of the forecasting simulation model in the planning process in the enterprise

2021 ◽  
pp. 25-32
Author(s):  
Dinara Olzhabayeva ◽  
Maria Petrovskaya Vladimirovna
Keyword(s):  
Simulation Model ◽  
Financial Risk ◽  
Planning Process ◽  
Financial Risks ◽  
Key Factors ◽  
Managerial Decisions ◽  
Railway Industry ◽  
Multi Level ◽  
The Cost ◽  
The Impact

This article discusses the features of using a multi-level simulation model of financial and economic forecasting when planning the activities of an enterprise operating in the railway industry, in particular in the segment of national and international freight transportation. The authors set a goal to show how, through the use of a multi-level simulation model of forecasting, it is possible to significantly increase the reliability of organizational and managerial decisions and ensure a more efficient allocation of resources and reduction of financial risks. The model constructed by the authors can be used to optimize costs, improve the quality of settlements with debtors and creditors, plan the cost and other indicators of financial and economic activity, the ability to build various forecast scenarios allows you to choose the most acceptable option for the company, taking into account the impact of key factors on the financial result and the level of financial risk.

scholarly journals Financial Risk Assesment of Post Tsunami 2004 Shrimp Production in Aceh

2020 ◽  
Vol 2 (1) ◽  
Author(s):  
A U Fitrah ◽  
N A Nasution ◽  
A Nugroho ◽  
A Maulana ◽  
Irwan Irwan
Keyword(s):  
Financial Risk ◽  
Shrimp Farming ◽  
Production Costs ◽  
Financial Risks ◽  
High Frequencies ◽  
Risk Assesment ◽  
Shrimp Production ◽  
Aceh Province ◽  
The Impact ◽  
Tsunami 2004

This study aims to identify and to measure the impact of financial risks on shrimp farming in relation to post-tsunami 2004 in Aceh and shrimp diseases. Interviews using questionnaires were conducted on 47 shrimp farmers in five shrimp producing regions in Aceh Province. The risks assessments were measured in frequency of the occurence and the severity of the impacts. This study shows that financial risks due to natural disasters and diseases consisted of production and marketsaspects. The deterioration in selling prices and the increase in production costs would affect major impacts as well as having relatively high frequencies.

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