MINISTRY OF EDUCATION AND SCIENCE OF THE RUSSIAN FEDERATON FEDERAL STATE-FUNDED EDUCATIONAL INSTITUTION OF HIGHER VOCATIONAL EDUCATION “PYATUGORSK STATE LINGUISTIC UNIVERSITY” The Higher School of Political Administration and Innovative Management Chair of Profession-Oriented English Ivan Grigoryan MM-301. Risk management (The Mini-Project of the Subject "Business Basics (in English)” Profile: International Management Research Advisor: Associate Professor of the Chair of Profession-Oriented English Natkho O. I. Pyatigorsk 2014
Content
INTRODUCTION …………………………………………………………..3
METHODOLOGICAL FOUNDATIONS OF FINANCIAL RISK MANAGEMENT…………………………………………………………….4
GENERAL DESCRIPTION OF THE ENERPRISE………………………...6
EVALUATION OF FINANCIAL RISKS…………………………………..7
PRACTICAL RECOMMENDATIONS…………………………………….8
CONCLUSION………………………………………………………………10
BIBLIOGRAPHY……………………………………………………………11
Introduction
Currently, all organizations working in the financial crisis while factors such as globalization, technological development, constant restructuring, changing markets, competition and innovation in the regulation, all this leads to uncertainty in which entrepreneurs are forced to work.
Uncertainty also exists arises in connection with the ongoing organization of the elections of certain embodiments of strategic development. For example, an organization may have a development strategy, providing access to the markets of other countries. Such a strategy, on the one hand, involve risks, and on the other hand, provides opportunities associated with the stability of the political situation in the country, the availability of resources, markets, infrastructure, labor and low costs.
Valuation of financial risk management provides a basis for effective decision-making under uncertainty.
The evaluation of financial risks is planned risk management process in the organization. Management determines which way to respond to the risk in the organization preferred - risk avoidance, risk reduction, risk transfer or risk taking.
Relevance of the topic and the project is due to the fact that the financial risk management is a continuous process involving the whole organization, carried out by employees at all levels of the organization, for use in developing and shaping the strategy is implemented throughout the organization at every level and in every department, and includes an analysis of the risk portfolio at the organization level.
Methodological foundations of financial risk management
In business activities under the "risk" is taken to mean the possibility (threat) now losing part or all of their resources, revenue, or the emergence of additional costs as a result of certain operational and financial performance.
In the phenomenon of "risk" include the following elements, the relationship which constitutes its essence:
the possibility of deviation from the intended purpose for which it was carried out the selected alternative;
the likelihood of achieving the desired result;
lack of confidence in achieving this goal;
the possibility of material, moral and others. losses associated with the implementation of the selected alternative in the face of uncertainty.
Financial risk associated with the implementation of an entrepreneur financial transactions. Sources of risk: changes in tax and customs policy, monetary restrictions operations.
Financial risk of the company - is the possibility of adverse financial consequences in the form of loss of income and capital under uncertainty conditions for the exercise of its financial activities.
Risk assessment - a procedure for identifying risk factors and assess their significance, or the analysis of the likelihood that there will be some adverse events and adversely affect the achievement of economic entities.
Risk assessment can be divided into two mutually complementary types: qualitative and quantitative.
Quantify in absolute terms, the risk can be determined magnitude of potential losses in material or monetary terms. In relative terms, to quantify the risk is defined as the potential losses, attributed to a base, in the form which is most convenient to take a property condition of the enterprise, or the expected return. Then the losses we assume random deviation profits, revenue, earnings downward.
The first step in conducting qualitative risk analysis is a clear definition of all possible financial and business risks. Consideration of each type of risk can be made with three positions:
from the viewpoint of the causes of this type of risk;
from the point of view of the possible negative consequences of risk;
in terms of specific measures that reduce the negative effects of the risk in question.