Recommendations for risk management of the company’s investment project

Abstract Risk management is an integrative part of all types of project management. One of the main tasks of pre-investment studies and other project documentation is the tendency to protect investment projects as much as possible against investment risks. Therefore, the provision and regulation of risk information ensure the identification of the probability of the emergence of adverse events, their forms, causes and consequences, and provides a timely measures of protection against risks. This means that risk management involves a set of management methods and techniques used to reduce the possibility of realizing the adverse events and consequences and thus increase the possibilities of achieving the planned results with minimal losses. Investment in mining projects are of capital importance because they are very complex projects, therefore being very risky, because of the influence of internal and external factors and limitations arising from the socio-economic environment. Due to the lack of a risk management system, numerous organizations worldwide have suffered significant financial losses. Therefore, it is necessary for any organization to establish a risk management system as a structural element of system management system as a whole. This paper presents an approach to a Risk management model in the project of opening a surface coal mine, developed based on studies of extensive scientific literature and personal experiences of the author, and which, with certain modifications, may find use for any investment project, both in the mining industry as well as in investment projects in other areas.

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Current Issues in Assessment of Risks Related to Investment Projects

International Journal of Engineering & Technology ◽

10.14419/ijet.v7i3.15.18701 ◽

2018 ◽

Vol 7 (3.15) ◽

pp. 336 ◽

Cited By ~ 1

Author(s):

Alexander Sergeevich Voronov ◽

Mikhail Vladimirovich Karmanov ◽

Irina Anatolievna Kiseleva ◽

Vladimir Ivanovich Kuznetsov ◽

Lidia Sergeevna Leontieva

Keyword(s):

Risk Assessment ◽

Risk Management ◽

Investment Project ◽

Investment Projects ◽

Project Valuation ◽

Analysis Methods ◽

Project Risks ◽

Capm Model ◽

Definition Of

The definition of the essence of an object of management in economics is an indispensable component of professional risk management. Since the national risk management theory is just being formed, the need to find a clear and comprehensive definition for the notion "risks" is especially topical. Capital valuation is one of the most important issues, which needs to be solved by companies during ROI studies. This article makes an attempt to study the role of risk management in the implementation of investment projects. The main purpose of this article is to identify the main regularities which determine the peculiarities of risk assessment in business, being the key element facilitating the organization of investment projects. The objectives have been as follows: to review the basic concepts of risk management; to study its components in business; to reflect the system and risk management principles, and to carry out risk assessment; to consider the main kinds of risks in the business area.The article describes various types of investment and project risks, risk analysis methods for investment projects, as well as efficiency indicators of investment projects, and provides an analysis of risk factors and uncertainties during the development of investment projects. The peculiarities of the practical use of project risks’ analysis methods have been studied. Risk assessment methods for an investment project help evaluate its feasibility, the time within which it will start being profitable, as well as the probabilistic volume of its future profits. Investment project valuation models have been analyzed, in particular, the CAPM model for emerging capital markets. The DCF method has been studied, being the base for assessing the attractiveness of business in general and a company's investment project in particular.

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RISK - MANAGEMENT OF INVESTMENT PROJECTS USING QUALIMETRIC ANALYSIS

ASJ. ◽

10.31618/asj.2707-9864.2021.1.46.87 ◽

2021 ◽

Vol 1 (46) ◽

pp. 64-67

Author(s):

М. Tashbaev ◽

B. Abdullaeva ◽

А. Beisenov

Keyword(s):

Risk Management ◽

Financial Stability ◽

Investment Project ◽

Financial Risks ◽

Investment Projects ◽

Depth Analysis

This article discusses an in-depth analysis of the financial risks of investment projects based on the assessment of financial stability indicators, and the determination of the company's solvency class. This analysis allows you to determine whether an enterprise presenting an investment project on the market is capable of paying off its obligations and minimizing the investor's risks

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Special aspects of using hybrid financial tools for project risk management in Ukraine

Investment Management and Financial Innovations ◽

10.21511/imfi.15(2).2018.23 ◽

2018 ◽

Vol 15 (2) ◽

pp. 257-266 ◽

Cited By ~ 2

Author(s):

Volodymyr Mishchenko ◽

Svitlana Naumenkova ◽

Viktor Ivanov ◽

Ievgen Tishchenko

Keyword(s):

Risk Management ◽

Investment Project ◽

Financial Risks ◽

Financial Instruments ◽

Project Financing ◽

Currency Options ◽

Forward Contracts ◽

Investment Projects ◽

National Bank ◽

Management Of Project

The relevance of the article is due to the need of using non-traditional tools for capital raising and hedging financial risks in Ukrainian conditions that allow investors to protect themselves against possible losses during the entire life cycle of the investment project. The study is based on the National Bank of Ukraine statistical data, data of Ukrainian commercial banks, as well as on the authors’ calculations based on empirical and economic-statistical methods. According to international practices, hybrid financial instruments were classified and the special aspects of their use in Ukraine were studied to manage the risks of project financing. Specific features of using the structured bonds for financing investment projects are determined based on the synthetic securitization scheme. The experience of Ukrainian banks was analyzed and the necessity to use financial instruments such as guarantees and letters of credit in risk management of project financing was substantiated. It has been established that forward contracts, currency swaps and over-the-counter currency options are the most acceptable instruments for hedging foreign exchange risks of project financing. Further studies of the problem should include the need for legislative regulation of using hybrid financial instruments, as well as methodological and regulatory support for the risk management of project financing at all stages of the investment project implementation.

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Alternative approach to analysis of risks affecting the efficiency of implementing the investment project in the conditions of global instability of economic space

SHS Web of Conferences ◽

10.1051/shsconf/20207406009 ◽

2020 ◽

Vol 74 ◽

pp. 06009

Author(s):

Liana M. Chechenova ◽

Natalia V. Volykhina ◽

Yuriy V. Egorov

Keyword(s):

Risk Management ◽

Risk Analysis ◽

Investment Project ◽

Management Decision ◽

Global Instability ◽

Random Factor ◽

Economic Space ◽

Investment Projects ◽

Expert Assessments

This article is devoted to the study of improving the use of expert assessments for risk analysis, affecting the effectiveness of the implementation of a comprehensive investment project in the global instability of the economic space. The existing methods of expert assessments and Monte-Carlo simulation methods used to identify and assess the risks of investment projects are described. A systematic analysis of the main risks of investment projects in the context of globalization and risk management methods was carried out. The author’s classification of risks of investment projects using the criteria of economic efficiency has been developed. An approach to risk analysis, affecting the effectiveness of the implementation of complex investment projects based on existing methods using the concept of the “reduced” random factor, is proposed. This approach is used to analyse project implementation risks in the conditions of market instability with the development of recommendations for managing the main project risks. The author’s risk classification of investment projects is important at the stage of analysing risks arising from the study of sales markets, as well as during the management decision-making process, which minimizes the possible adverse impact on an organization, including losses caused by random events. The proposed approach can be applied to the analysis, express-analysis and risk management of long-term complex investment projects in the conditions of global instability of the economic space.

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Planning, Accounting and Control as Risk Management Tools for Small Business Investment Projects

Emerging Science Journal ◽

10.28991/esj-2021-01302 ◽

2021 ◽

Vol 5 (5) ◽

pp. 650-666

Author(s):

Svitlana Bondarenko ◽

Natalya Shlafman ◽

Nataliia Kuprina ◽

Olga Kalaman ◽

Olena Moravska ◽

...

Keyword(s):

Risk Management ◽

Early Warning ◽

Small Businesses ◽

Negative Impact ◽

Warning System ◽

Investment Project ◽

Investment Projects ◽

Management Actions ◽

Methodological Approaches ◽

And Control

The purpose of this study is to develop scientifically sound proposals and recommendations for the implementation of planning, accounting and control tools in risk management of investment projects of small businesses. The relevance of this study is due to the need to provide small businesses with effective methods of risk management of the investment project, which can significantly reduce the negative impact of risk factors and achieve a significant effect from the investment. To achieve the goal of the study, methodological approaches were used to assess the risk sustainability of the enterprise, based on the assessment of the resource potential of the enterprise. A system of indicators is proposed to assess the quality of enterprise resources. Theoretical and methodological approaches to the formation of an early warning system in risk management have been developed. The proposed concept of indicative management includes tools for indicative control of investment projects in relation to the risk sustainability of the enterprise from the standpoint of its resource provision. Risks in this case become key indicators to which management actions should be directed. The introduction of a risk passport is proposed as a tool for early warning of crisis phenomena in small enterprises. The authors proved that the risk prevention system should be integrated into the overall organizational structure and become part of the enterprise management system. Indicative management is proposed as a tool for implementing functional strategies to prevent or eliminate threats and maximize their strengths and capabilities. Doi: 10.28991/esj-2021-01302 Full Text: PDF

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Project finance risk management for public-private partnership

Investment Management and Financial Innovations ◽

10.21511/imfi.14(4).2017.14 ◽

2017 ◽

Vol 14 (4) ◽

pp. 171-180 ◽

Cited By ~ 4

Author(s):

Oleh Kolodiziev ◽

Viktoriia Tyschenko ◽

Kateryna Azizova

Keyword(s):

Risk Management ◽

Capital Investment ◽

Investment Project ◽

Public Private Partnership ◽

Project Finance ◽

Private Partnership ◽

Investment Projects ◽

Risk Management Process ◽

Private And Public ◽

Finance Risk

The development of public-private partnership in Ukraine in recent years has become very important as an instrument of anti-crisis orientation. The real economic situation objectively creates the preconditions for more effective use of this mechanism and institutes of public-private partnerships in order to ensure sustainable economic development, obtain new ones and improve the quality of public services provided to the population.The objective of the research is to identify the components of project finance risk management and to provide justification of effective and balanced sharing of risks between public and private partners as the prerequisite and the main principle of effective implementation of public-private partnership.The authors used the following research methods: systemic approach, theoretical and empirical methods of scientific knowledge.This paper examines types of investment project financing by banks based on public-private partnership. It defines the structure of public-private partnership according to sources of capital investment in the project vehicle. The paper identifies components of the risk management process in project finance. It proves that a balanced distribution of risks between the private and public partners is the key requirement and the primary principle of effective public-private partnership. In this way, the need for mobilization of additional financial resources for implementation of investment projects calls for extended cooperation of state agencies and banks as a part of the effort of economic crisis management.

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Risk management of an investment project in the manufacturing sector

10.33920/pro-3-2109-06 ◽

2021 ◽

pp. 44-52

Author(s):

T.V. Orel ◽

I.V. Korneeva

Keyword(s):

Risk Management ◽

Manufacturing Sector ◽

Investment Project ◽

Investment Projects

Planning investment projects involves the need to study the risks that affect the profitability of projects. Otherwise, such investment projects can lead to significant losses. Therefore, timely identification and management of all risks of an investment project is of particular importance.

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Risk Management of the Investment Project

Scientific Research and Development Economics of the Firm ◽

10.12737/article_5a572de19d81c8.44406598 ◽

2018 ◽

Vol 6 (4) ◽

pp. 17-24

Author(s):

Елена Моргунова ◽

Yelyena Morgunova ◽

М. Моргунова ◽

M. Morgunova

Keyword(s):

Risk Management ◽

Coal Mining ◽

Investment Project ◽

Mining Sector ◽

Investment Projects ◽

Project Risks

The article presents the results of a study on risk management of an investment project, using the example of projects in the coal mining sector. Issues of identification and evaluation of project risks are considered. An integrated and holistic mechanism for understanding problems related to risk management of investment projects has been formed.

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RISK MANAGEMENT METHODOLOGY OF INVESTMENT PROJECTS WITH ENVIRONMENTAL IMPACT

Journal of Engineering Studies and Research ◽

10.29081/jesr.v21i1.38 ◽

2016 ◽

Vol 21 (1) ◽

Author(s):

ELENA GINDU ◽

AUREL CHIRAN ◽

BENEDICTA DROBOTĂ ◽

ANDY-FELIX JITĂREANU

Keyword(s):

Risk Management ◽

Environmental Impact ◽

Net Present Value ◽

Investment Project ◽

Project Schedule ◽

Investment Projects ◽

Risk Of Failure ◽

Impact Risk ◽

Risk Management Methodology ◽

Legislative Changes

In projects, a strategic component is to identify all risks that might influence their success, prevent and manage them effectively. Risk management is essential to add value to an investment and improve results. With the economic and financial crisis in recent years, increasingly, more companies have realized the importance of using a system of risk management, given the multitude of variables that can influence the success of a project. These include: legislative changes, global political and economic instability, natural disasters, climate change, human resources, liquidity risk, environmental impact, risk of erroneous calculation of total project costs, risk of failure into initial project schedule, prolongation risk, the risk of failure of internal rate of return (IRR) and net present value (NPV) etc. The study proposes a new method of risk assessment and management in the investments projects with environmental impact and its application in a case study. The method will take into consideration besides the economic and financial indicators, hard to be understood by smaller investors, a set of simple and important questions that they have to analyze before deciding to start an investment project. The new methodology will have a comprehensive approach from identifying the investment opportunity, writing investment project until its implementation. This will take into account macroeconomic variables and the microeconomic environment that can influence the success of project implementation. The main advantage of applying the new methodology are: knowing all the variables that influence the success of a project realization; awareness of the importance of applying an effective risks management related to investment projects with environmental impact, increasing the quality and success of projects.

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