Финансовая среда предпринимательства, предпринимательские риски. Учебное пособие

The next topic of our course is risk classification It is both easy and a difficult topic

This is an easy task because there are many risk classifications.

And this is a difficult task because risk classification must fully comply with company’s business processes.

In this lecture we will review two examples of classification.

As we can see on the slide, business risk can be considered National and International

National level risks are categorized in I to Macroeconomic and Microeconomic levels

At Macroeconomic level risk can be identified as National and Local

National risk may occur in the following cases: Creating an economic development strategy, Choice and implementation of options which provide priorities for economic development, Creating concepts of economic transformation

Local risk may occur in the following cases: At the sectoral level of management, At the regional level of management

At Microeconomic level rickology highlights six types of risk: Production (net), Investment and innovation, Financial, Trade, Complex, Bank.

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Fig. 3.1

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For microeconomic risks the area where they manifest themselves is very important.

Examples of this we will see on the next slides.

For example – the first area of manifestation is manufacturers.

For the first areg of risks 6 types of risk are typical:

1.Industrial (net) risk - Risk of stoppage in production, Risk of irregular work, Risk of natural disaster, accident and catastrophe

2.Investment risk - Risks at the project preparation stage, Risks at the project implementation stage

3.Financial risk - Bankruptcy risk, Risk of shortage in income, Risk of securities transactions

4.Trade risk - Goods shortage risk, Risk of absence of demand for goods

5.Complex risk - Risk of inflation

6.Bank risk - Credit risk, Interest rate risk, Risk of imbalance in liquidity, Deposit risk, Risk in calculation, Risk of bank abuse

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The Next one is manifestation for individuals. There are only four types of risks:

1.Production risk - Risk of disability

2.Investment risk - Risk of transaction with securities

3.Trade risk - Risk of unemployment

4.Complex risk - Risk of inflation

Manifestation of business risks

Subject 2 – Individuals

Fig. 3.3

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The Next manifestation is other legal entities There are only three types of risk

1.Financial risk - Foreign exchange risk

2.Trade risk - Risk of absence of demend for public services

3.Complex risk - Risk of business and consumer response to government acts, risk of inflation

Manifestation of business risks

Subject 3 – Other legal entities

Fig. 3.4

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We studied one classification example

On the next slide, we can notice another kind of classification

Author of this classification subdivides risks into two large groups: Net risk and Speculative risk

As we can see: Net risks are:

1.Natural

2.Political

3.Transport

4.Ecological

5.Trade

6.Property

7.Industrial

Speculative risks are Financial, and Financial risks are Investment and commercial risks.

Financial and Commercial are Risks, associated with purchasing power (ability) of money: Foreign exchange risk, Inflationary and deflationary risk and Risk of liquidity

Investment risks are as follows:

1.Lost profit

2.Decline in income : lower interest

3.Direct losses : Stock exchange , Selective risk,

Bankruptcy and Credit risk

A competent risk classification is needed for a financial manager to choose the right method of managing risks

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In the Webster dictionary “risk” is “ the clarity, the possibility of boss or damage”

In the Ozhegov dictionary “risk” is “possibility of danger” or “action on luck in the hope of happy outcome”

In the dictionary-directory for entrepreneurs (businessmen) is concept of “entrepreneurial risk” as description of “possibility of failures, losses in business activities, which in case of negligent, illiterate approach to business can to undesirable consequences, damages”

Financial risk

Financial riskrisk that arises in process (during) of financial transaction

The possibility of certain financial consequences in situation of financial and economic uncertainty

Financial risk

Financial riskrisk which arises in process (during) of financial transaction

The possibility of certain financial consequences in situation of financial and economic uncertainty

Ways to manage risk

Active

Adaptive

Conservative

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Ways to manage risk

Fig. 4.1

In general the work on measuring and managing risks goes along the following plan:

Identification of external and internal factors that increase and reduce certain types of risk is Analysis of identified factors Analysis of identified factors is done using two approaches

in assessment of a specific risk type

Then you need to perform the following steps: The approaches in assessment of a specific risk type can be as follows: Determination of liquidity of project, Determination of economic efficiency of investment, Setting an acceptable risk level

Setting an acceptable risk level is Analysis of transactions at a selected risk level

And Analysis of transactions at a selected risk level is Development of measures to reduce risk level

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