Financial Risk Analysis Research Articles

Correction to: Analysis of Internet Financial Risks Based on Deep Learning and BP Neural Network

Correction to: Analysis of Internet Financial Risks Based on Deep Learning and BP Neural Network

Analysis of Banking Risks According to IFRS 7 and its Impacts of Financial Failure Forecasting in Iraqi Private Banks

Understanding the relationship between financial risks and the likelihood of financial failure is crucial for both practitioners and academics. A proper comprehension of these issues helps the banking sector avoid the consequences of failure and enhances risk management practices. The purpose of the current paper is to determine the impact of financial risk analysis according to IFRS 7 in predicting financial failure. A sample of six well-established Iraqi banks was selected, and their financial statements were analyzed for the period from 2019 to 2023. Using a quantitative approach, financial risks were measured through a set of appropriate financial ratios and methods. Financial failure was assessed using the Sherrod model. The results indicated that the financial risks associated with the operations of Iraqi banks ranged from moderate to high, and that risk management practices varied significantly between banks. The findings revealed that the surveyed banks fell within the zone of non-failure indicators. Additionally, the results showed a positive impact of the three types of risks in contributing to financial failure within the sector's banks.

Financial risk analysis of Public-Private Partnership (PPP) projects case study on Pandaan - Malang Toll Road

This study aims to analyze the financial risks faced by the Pandaan-Malang Toll Road PPP (Public-Private Partnership) project in Indonesia. Data collection techniques include semi-structured in-depth interviews with parties related to the PPP project, including the Directorate General of Infrastructure Financing, the Tolling Road Management Agency (government), and Business Entities (PT Jasamarga Pandaan Malang). The collected data will be analyzed to determine the financial risk factors faced by PPP projects and the financial controls carried out to overcome financial risks in PPP. The results show that the risk of errors in forecasting in the calculation of demand, cost, and revenue projections is a risk that almost often occurs. The Government emphasizes the importance of optimizing the role of PII (Persero) or Indonesia Infrastructure Guarantee Fund (IIGF) as an Infrastructure Guarantee Business Entity (BUPI) to ensure financial sustainability and minimize the impact of sudden shocks on the State Budget due to the provision of Government Guarantees for cooperation projects. This study provides insights or frameworks that can be applied to similar projects, helping to improve risk assessment and decision-making processes in future infrastructure developments.

Fuzzy financial risk analysis of net-zero transitions in public–private partnership projects in Ghana

Fuzzy financial risk analysis of net-zero transitions in public–private partnership projects in Ghana

Food Safety Analysis Based on Halal Food with The Use of Water as a Food Need in Indonesia

Halal food security in Indonesia is a complex issue viewed from a religious perspective, especially in water processing. This article examines the public's understanding of the water treatment process, whether halal or non-halal. This research also examines the risks from the views of people with this understanding. The method used uses a literature study consisting of several pieces of literature that are reviewed and analyzed descriptively to understand the existing problems properly. The results of this research answered this understanding with an analysis of environmental, technical, social, financial, security, and institutional risks, as well as a comparison with regulations and hadith. The water treatment process carried out by water management institutions follows the rules and is considered to duplicate natural processes, namely the water cycle. This perspective is also supported by several regulations in Indonesia, which indicate that food safety, especially water, can be adequately implemented. This study shows that there is always involvement between officeholders, service providers, and the community in maintaining the safety of water sources.

K-Nearest Neighbors Estimator for Functional Asymmetry Shortfall Regression

This paper deals with the problem of financial risk management using a new expected shortfall regression. The latter is based on the expectile model for financial risk-threshold. Unlike the VaR model, the expectile threshold is constructed by an asymmetric least square loss function. We construct an estimator of this new model using the k-nearest neighbors (kNN) smoothing approach. The mathematical properties of the constructed estimator are stated through the establishment of the pointwise complete convergence. Additionally, we prove that the constructed estimator is uniformly consistent over the nearest neighbors (UCNN). Such asymptotic results constitute a good mathematical support of the proposed financial risk process. Thus, we examine the easy implantation of this process through an artificial and real data. Our empirical analysis confirms the superiority of the kNN-approach over the kernel method as well as the superiority of the expectile over the quantile in financial risk analysis.

Design and research of enterprise risk management avoidance system based on KGN-LLM algorithm

With the increasing complexity of enterprise asset management, traditional risk management methods have become inadequate to meet the demands of real-time monitoring and efficient decision-making. In order to improve the efficiency and security of enterprise asset management, this paper proposes a method for reasoning the avoidance of enterprise asset flow management risks based on the KGN-LLM algorithm. It primarily involves the field of financial risk avoidance, including preprocessing and analysis of enterprise asset flow data, constructing a knowledge graph of enterprise asset flow data using the KGN-LLM model, monitoring real-time asset management data, identifying and analyzing risks, evaluating identified risks, and implementing asset management risk avoidance decisions. It is demonstrated that this method of reasoning the avoidance of enterprise asset flow management risks based on the KGN-LLM algorithm can effectively improve the efficiency and security of enterprise asset management.

Analysis of financial risks in the enterprise CJSC “Tommoloko”

Analysis of financial risks in the enterprise CJSC “Tommoloko”

Optimizing Stock Markets Trading with Poisson Process Simulation

Industrial and Operations Research (IEOR) is an interdisciplinary field that leverages mathematical, statistical, and computational techniques to design, analyze, and optimize complex systems. In the context of the Simulation for Enterprise-Scale Systems course, the knowledge gained from IEOR can be applied to address a range of issues related to financial modeling, risk analysis, and decision- making within financial corporations. One area where simulation is particularly prevalent is in the financial markets, where price fluctuations can create significant arbitrage opportunities. The focus of this inquiry is on utilizing simulation systems to facilitate stock market trading, considering factors such as market noise, information asymmetry due to information lag, and other elements in order to optimize portfolio performance through arbitrage operations in the current market state.

Financial Risk Analysis of SINOSUN Technology Co., Ltd.

Nowadays, the market competition is getting bigger and bigger, and the enterprise is always facing the risk. If it does not carry on the risk research to control, the enterprise is likely to operate in the obstacle. Science and technology are the foundation of a strong country, with the continuous promotion of the strategy of strengthening the country with science and technology, science and technology companies have many business opportunities, but the opportunities are often hidden in the risk. This paper takes SINOSUN Technology Co., Ltd. as the object of the study, compares and analyzes the operating data of the industry's HONGBO Joint Stock Company and East Port Joint Stock Company, and adopts the ratio analysis method and the comparative analysis method. Combined with the relevant financial indicators, the entropy value method is used to analyze and identify the financial risk problems of SINOSUN Technology Company, including the four aspects of financing, investment, operation, and distribution, with the main problems of weak short-term solvency, low R&D efficiency, and low profitability, and then put forward relevant preventive suggestions for the enterprise's problems. This paper aims to let the company as far as possible to foresee the financial risk and control, but also hopes for similar enterprises for financial risk analysis and management to provide case reference and reference significance.

Transformation of Various Measures of Financial Risks with their Limitation on Outcomes Associated with Losses

In assessing the risk of investing in various financial assets, risk management focuses on the analysis of the worst possible losses (the right tail of the loss distribution). At the same time, most often, when speaking about losses, it is assumed that losses can, in principle, take on negative values (which corresponds to receiving positive profits). However, there are many theoretical studies suggesting that losses take only positive values. Many risk managers use only a portion of the sample of data that corresponds to positive losses when assessing the relevant risk measures using the statistical method or the Monte Carlo method. The purpose of this paper is to study the transformation of risk estimates of various levels of catastrophicity with such a change in the space of elementary events, and hence the law of loss distribution. The paper uses methods of analysis of financial risks of various levels of catastrophicity, including methods developed in the author’s previous papers. As a result of the study, it turned out that with such a transformation of the random value of losses, all the most important estimates are significantly transformed with the help of risk measures of various catastrophicity. The author concludes that the theoretical conclusions of the work will also contribute to a more conscious understanding of the theoretical results and the results of practical risk assessments, depending on the basis on which this assessment was made: allowing losses to accept negative values or focusing only on their positive values.

Понятийный аппарат и практика оценки и контроля налоговых рисков субъектов предпринимательства в условиях изменчивости налоговой среды

Tax risks are situations in which an enterprise may face loss or damage related to taxation as a result of incorrect application of tax rules, incorrect interpretation of legislation or other circumstances that may lead to negative financial consequences. Enterprises often suffer losses either due to tax due to the accountant's ignorance of tax legislation, or due to the excessive riskiness of the accountant's decision-making and subsequent accrual of penalties, fines, additional payments and even litigation. However, methodological foundations and methodological apparatus for assessing tax risks of business entities have not yet been fully studied. It is accurately proved that study of tax risks classification contributes to more accurate accounting, analysis and management of financial risks of an enterprise, as well as helps to comply with laws and regulations, which is a key factor for successful and sustainable operation of any company. There is an extensive classification of tax risks according to different principles: by type of tax risk, by the source of occurrence (by risk determining factors), according to the time of occurrence, according to the amount of possible losses, according to the type of tax risks consequences, according to the object of connection with other types of risks, according to the nature of consequences, according to the possibility to overcome, and according to the level of probability of tax risks occurrence. Tax risk assessment is an important and integral part of the enterprises tax management in the Russian Federation. This process allows business entities identifying and analyzing potential threats and negative consequences related to taxation, and develop strategies to minimize and manage them. The purpose of the study is to analyze tax risks which enterprises in the Russian Federation face and to develop methods and recommendations for their assessment and management in order to ensure financial stability and compliance with tax legislation. The methodology of the study is formed of standardized methods to assess the degree of compliance of the enterprise tax practice with applicable laws and standards. Empirical methods, in particular the analysis of statistical data, and case studies are used. As a result, the key factors influencing tax risks occurrence are highlighted. Modern methods of assessing tax risks matrix are summarized and practice of applying of tax risk analysis matrix and matrix of paired preferences of tax risks is presented. Ways to minimize tax risks were proposed using the example of LLC Krasnaya Polyana Agro-Industrial Complex, and a scheme of its tax risk control system was proposed. The results of tax risk assessment serve the basis for the development of tax strategies and risk management processes. Enterprises can minimize tax risks by optimizing the tax strategy proposed by the authors, creating reserves and constantly monitoring tax environment changes.

Analysis of Financial Risks and Preventive Measures in The Process of Reverse Transnational Merger and Integration of Chinese Enterprises

Reverse transnational merger and acquisition is a kind of international operation mode in which enterprises in emerging markets merge or acquire enterprises in advanced countries, so as to obtain strategic resources. This is also a "springboard" for enterprises in emerging economies to obtain foreign resources and quickly move to the international market. The Chinese government plays an important role in cross-border mergers and acquisitions, and the integration process is becoming more difficult and the merger is becoming more likely to fail. In addition, Chinese enterprises show new characteristics in many aspects, such as the object of merger and acquisition, the object of merger and acquisition, the industry and the way of merger and acquisition. Through cross-border mergers and acquisitions, enterprises can expand overseas markets, achieve transformation and upgrading, and improve the core competitiveness of enterprises. Based on the case of Geely Auto's acquisition of Volvo, this paper analyzes various financial risks it faces in overseas mergers and acquisitions, and puts forward corresponding countermeasures for Chinese enterprises to prevent and guard against financial risks in overseas mergers and acquisitions and promote the smooth progress of mergers and acquisitions.

Financial Risk Analysis in the Operation of Sports Events from a Commercial Perspective

With the acceleration of globalization, the sports industry has shown vigorous development momentum under the precise efforts of recent policies, gradually entering a new golden period of development. Various international sports events have flourished, becoming an important force in promoting the development of the global sports industry. Organizers of commercialized international sports events, as independent economic entities responsible for their own profits and losses, bear the important mission of promoting the development of the sports industry and enhancing international influence. They face risks and challenges from political, economic, cultural, and other aspects, while also being vigilant against the potential threats of financial risks. To meet these challenges, organizers must continually improve their financial management capabilities, strengthen risk assessment and prevention, to ensure the smooth progress of the event and the maximization of economic benefits. Only in this way can commercialized international sports events stand undefeated in the fierce market competition and contribute to the continuous and healthy development of the sports industry.

Financial Risk Analysis - Case study Guri I Zi in the Municipality of Shkodër in Albania

Vegetable farmers operating in Guri I Zi, located in the Shkodra district, meet 42% of the vegetable market demand in the region. To identify the most important financing risks faced by these farmers when searching for financial resources, a study was conducted to analyze the financing risks related to their activity. The study used descriptive analysis and multiple regression analysis techniques to determine the main factors influencing the financing risks of these farmers. The study found that farmers perceived low profits, excessive debt, and high-interest rates as critical financing risks. However, the multifactorial analysis revealed that low earnings were statistically insignificant, while excessive debt and high interest rates were statistically significant. Regression analysis showed a strong correlation between financial risk, excessive debt, and high interest rates at 86%. The main objective of the study was to make farmers aware of the importance of financial risks.

Financial Management Risk and Legal Risks Analysis: Take Pfizer as an Example

With the continuous growth of the global biotechnology and vaccine industry, more and more companies are joining in. Risk assessment in the field of biopharmaceuticals has drawn the attention of the whole society. There are lots of factors such as market competition, government intervention, cost increases, product safety, and breaking laws and rules, resulting in an increase in the company's financial risk. Facing these challenges, this research is based on overall analysis and searching for company data, by adopting the company's financial risk management calculation method to compare the selected companies, such as market risk-return rate, market risk-free return rate, weighted average capital cost, and so on. This research has found that Pfizer has a higher risk compared to other companies but the challenges and opportunities coexist by raising legal awareness, improving management measures, and other means to reduce risks. Its future development prospects are still considerable. The following is a multidimensional financial risk analysis of Pfizer Company.

Retracted: Enterprise Financial Risk Analysis Based on Improved Model C-Means Clustering Algorithm

Retracted: Enterprise Financial Risk Analysis Based on Improved Model C-Means Clustering Algorithm

Combining intra-risk and contagion risk for enterprise bankruptcy prediction using graph neural networks

Predicting the bankruptcy risk of small and medium-sized enterprises (SMEs) is crucial for making decisions about loans. Existing studies in both finance and AI research fields, however, tend to only consider either the intra-risk or contagion risk of enterprises, ignoring their interactions and combinatorial effects. This study for the first time considers both types of risk and their joint effects in bankruptcy prediction. Specifically, we first propose an enterprise intra-risk encoder based on statistically significant enterprise risk indicators for its intra-risk learning. Then, we propose an enterprise contagion risk encoder based on an enterprise knowledge graph for its contagion risk embedding. In particular, the contagion risk encoder includes both the newly proposed Heterogeneous Hyper-Graph Neural Networks (HHGNN) and Hierarchical Graph Transformer Networks (HGTN). Using these two types of encoders, we design a unified framework to simultaneously capture intra-risk and contagion risk for bankruptcy prediction. To evaluate the model, we collect real-world multi-sources data on SMEs and build a novel benchmark dataset called SMEsD. We provide open access to the dataset, which is expected to further promote research on financial risk analysis. Experiments on SMEsD against twelve state-of-the-art baselines demonstrate the effectiveness of the proposed model for bankruptcy prediction.

Особливості побудови індексу циклічного ризику з використанням фільтра Ходріка – Прескотта для моніторингу та управління банківськими ризиками

The article analyzes the impact of cyclical financial risks on the economy of Ukraine using the cyclical risk index. The index is designed to monitor the current level of cyclical risks, as well as possible accumulation in the future. Timely identification of risks with the help of an innovative tool gives the regulator enough time to react and implement anti-crisis measures. In addition, the methodology of index evaluation allows you to visualize not only the index, but also its components, which facilitates the interpretation of the used tool. The dynamics of cyclical risks during economic and financial crises is considered and the importance of their analysis for macroprudential policy is noted. The assessment of the cyclical risk index was carried out using the Hodrick – Prescott filter using indicators reflecting new lending, lending volumes, as well as the cost of lending. The indicators taken into account for the assessment of the index are used separately for the sector of households and non-financial corporations. The results of the analysis showed that after the crisis of 2008–2009, the index remained elevated until the next crisis in 2014, with the gap between non-financial corporations lending to GDP remaining positive. However, before the crisis of 2014–2016, there has been an expansion of cyclical financial risks. During 2017–2023, Ukraine was facing two crises: an economic one caused by the COVID-19 pandemic and a political one related to the russian invasion. The Financial Cycle Index did not predict the accumulation of cyclical systemic risks before these crises, but indicated an increase in risks since 2019. After the russian invasion Ukrainian economy suffered a sharp downturn, but the banking system withstood the test, providing liquidity and continuing lending operations. In general, the results indicate the need for an individual approach to the analysis and management of cyclical financial risks, taking into account the specifics of each country, its context, and the particularities of the financial sector.

Analysis of Financial Data Risk and Network Information Security by Blockchain Technology and Edge Computing

To solve the problem of computer network security, this study creatively establishes a new information security (IS) strategy recommendation system and a cooperative intrusion detection system (CIDS) based on blockchain (BC) and edge computing (EC) technologies. The innovation lies in the proposal of the real-time CIDS method. First, the related technologies and theories of the Bayesian network, deep learning (DL), and neural network (NN) are analyzed. Second, a real-time IS strategy recommendation system is constructed using NNs and expert systems, and CIDS is built on BC and DL networks. Finally, experiments compare recurrent NN and long-short term memory (LSTM). The research results reveal that the accuracy of LSTM can reach about 93%. The comparison between the single intrusion detection system (SIDS) and CIDS denotes that CIDS is better than SIDS in detection accuracy, and the specific performance is 97.54% > 91%. The proposed model based on business continuity management can help enterprises better protect financial data and establish a complete protection system of network information security (NIS). In this study, a CIDS with good performance is obtained, which lays a foundation for the further development of the NIS.