Risks in the activity of business entities: the concept of analysis and management

Abstract

The article identifies a list of risks that have an impact on the activities of modern enterprises. It is proposed to improve their classification. In particular, based on the use of the method of generalization and critical analysis, the identified risks are divided into objective and subjective risks based on causality, and systemic and non-systemic based on frequency of occurrence. The classification characteristic for objective risks is their irreversibility and direct impact on changes in the financial state of the enterprise, and for subjective risks - the human factor (they include risks that arise as a result of unqualified actions of responsible persons). Thanks to this, using modeling and formalization, an approach to analyzing the level of sensitivity of economic entities to risks was formed and its indicators and their critical values were substantiated. The graphic method is applied to form the concept of financial risk management based on their analysis. The essential content of the indicator of the level of sensitivity of the economic entity to risks, which is identified as a measure of the vulnerability of the economic entity in the process of its activity to the negative effects of the internal and external environment, is substantiated. Grouping, graphical approach and generalization were used to implement the proposal regarding the methodology and structure of the financial risk analysis process. The application of this approach will allow the company's management to develop a system of measures to eliminate risk factors in order to preserve its stable financial condition.