Investment risk
Posted: Sat Feb 01, 2025 6:02 am
This risk is the possibility of losses associated with investing in various projects or enterprises. A company that decides to launch a new product, expand its presence, open a new branch, or purchase new equipment will inevitably face the risk of losing money.
Investment risk
Source: shutterstock.com
Let's look at an example. An organization decides to form a line of household chemicals, but faces high competition and prices on the market that are close to cost price.
To reduce investment risk, a hong kong email list strategic plan was developed that focused on the production of products for laundries and dry cleaners. By combining stain removers, interior dry cleaning products and laundry detergents into a new line, the company was able to successfully diversify its product range.
Management of financial risks of an investment portfolio includes the following strategies:
Market analysis and constant comparison with competitors.
Careful calculation of the cost price of goods.
Development of a financial business model that includes a system of key indicators for forecasting possible profits and losses.
Calculating company performance using effective financial accounting.
Operational risk
Operational risk is the possibility of financial losses due to internal problems within a company. For example, due to human error, failures in business processes, or fraud.
Example: A dealer informs the company's manager that one of the managers offers to buy a product with a 20% discount, provided that the money is transferred to his personal card to "save on taxes." The manager, suspecting fraud, conducts an investigation using video surveillance and inventory. As a result, the fact of selling the product from the warehouse without taking into account cash transactions is confirmed. The company fires several employees and develops a new inventory management system.
Effective operational risk management includes:
Careful monitoring of the enterprise’s operations: keeping records of raw materials, stocks and finished products.
Responding to feedback.
Continuous improvement of business processes and search for vulnerabilities.
A comprehensive check of counterparties, including an analysis of financial statements, tax ratings, and judicial history, helps the organization manage financial risks. Specifying penalties in the contract can insure the project against violations of obligations by partners.
Investment risk
Source: shutterstock.com
Let's look at an example. An organization decides to form a line of household chemicals, but faces high competition and prices on the market that are close to cost price.
To reduce investment risk, a hong kong email list strategic plan was developed that focused on the production of products for laundries and dry cleaners. By combining stain removers, interior dry cleaning products and laundry detergents into a new line, the company was able to successfully diversify its product range.
Management of financial risks of an investment portfolio includes the following strategies:
Market analysis and constant comparison with competitors.
Careful calculation of the cost price of goods.
Development of a financial business model that includes a system of key indicators for forecasting possible profits and losses.
Calculating company performance using effective financial accounting.
Operational risk
Operational risk is the possibility of financial losses due to internal problems within a company. For example, due to human error, failures in business processes, or fraud.
Example: A dealer informs the company's manager that one of the managers offers to buy a product with a 20% discount, provided that the money is transferred to his personal card to "save on taxes." The manager, suspecting fraud, conducts an investigation using video surveillance and inventory. As a result, the fact of selling the product from the warehouse without taking into account cash transactions is confirmed. The company fires several employees and develops a new inventory management system.
Effective operational risk management includes:
Careful monitoring of the enterprise’s operations: keeping records of raw materials, stocks and finished products.
Responding to feedback.
Continuous improvement of business processes and search for vulnerabilities.
A comprehensive check of counterparties, including an analysis of financial statements, tax ratings, and judicial history, helps the organization manage financial risks. Specifying penalties in the contract can insure the project against violations of obligations by partners.