Risk Assessment in Business Recovery
Introduction.
In these times where the economy is being affected by the events of a disease that has kept the population without being able to exercise their work, companies are generating financial risks to which their senior executives have to face and making decisions so that the company canContinue to obtain stable profitability to compensate for losses and obtain profits that help them with the proposed objectives and maintain a position within the market. Companies are in uncertainty for all changes and are unable to be able to make their capital returns to those investors for instability in financial markets.
Developing.
Among the risks that can occur within a company is the risk of credit, liquidity, market, legal, operational and environmental. For this reason, companies must have alternatives to be able to solve and recover to continue generating money within their investments for the company’s economic stability. For this reason, there are certain tips, procedures or tools for which administrators must put into action to minimize financial risk and protect the company’s assets in such a way can be airy of these inconveniences that arise in companies.
When in a risk -speaking company it is the probability or uncertainty that an unexpected event arising that causes lost in the performance of the investment or profitability of the company. For this reason, business administrators refer to certain tools to generate money or recover the investment, so in this way they can obtain benefits to enjoy financial operations without any concern. There are different types of risks which can arise in companies.
First, the credit risk which is caused by the lack of compliance by not fulfilling payment obligations by one of the parties. This can occur when a car is acquired and does not comply with the payment, in which the expiration date will be compromised and the payment premium and rate of yields will increase. Also, non -compliance will make the possibilities of payment be measured either capital and interest. Second, liquidity risk is produced because one of the parties does not have the assets, but not quite liquidity to contract its obligations.
This is because the company becomes impossible to obtain its obligations of the effective flow necessary to face its short -term debts. Third, market risk which indecision or insecurity for external behaviors in the company. Which can arise due to changes in prices either of variable income, interest rates, raw materials, etc. We will see that there will be no attraction, since it will lose its value. In addition, when there are changes of a currency, since it affects the investment due to the change of the currency. Fourth, the operational risk because in the operational processes fraud, errors or omissions are committed from which the company’s policies are not being clear.
Fifth, legal risks which are associated with missing or omitting any documentation to operate in a certain sector or when a person is not authorized to represent and carry out the appropriate procedures. Sixth, the irrigation of the environment is why we are currently happening, which is because of natural disasters. It can arise through hurricanes, floods or fires, which will leave a decrease in the business field for not being prepared for these unexpected events. Companies must be prepared for any type of risk that may arise in the company’s path to neutralize or face the losses in a short time and continue strengthening the future of the company.
When an administrator can continue generating money or recovering investment is trained with all the tools to float to the company. Therefore, the time must be taken to analyze and investigate the profitability in investment. Since the reason for investing is to make money. For this reason, the evolution of the company in which dividend payment will be taken into consideration is important. In most cases, investors prefer long -term investments and that can mitigate variations in currency prices or variations in interest types.
Administrators can predict the future to be able to acquire early information to provide them with the privilege of acting so that interest types do not affect them and that are invested in the long term recurrently relieved with a lower effect on profitability. Also, they must know and understand the investments they chose to be sure that they adapt to the strategies to be able to tolerate the risk. Administrators must be able to identify them at the time of doing all the matters that correspond to them, since in this way they will see how dynamics they are as entrepreneurs.
There are dynamics, which the risk for them is not their weak because when they make decisions they are with their heads to prevent the impulse from dominating, since it concentrates on obtaining knowledge about the variable income and taking advantage of their assets. The one who is moderate has balances, since they like stability, but taking advantage of savings and can risk a medium term. The conservative is that the variable income and uses the fixed income for its capital. Understand that all administrators in their company seek diversification and that when they reach other markets they generate business and increase profitability.
Administrators when using diversification manage. But if on the contrary it makes commercialization with different products or services will have the opportunity to generate money and recover in your investment. When business diversification is used intertwined some factors, since it can create a specific and specific environment in which competitive forces and structural characteristics will depend on the company. Since the characteristics of the company will begin the action so that it can be developed with the social, political, economic and legal pressures.
Conclusions.
I know should take into consideration that expanding the investment scope is reduced by the risk of finance failure because when there are opportunities there must be an increase or greater profitability than when performing an expansion. The diversification broad.
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