MegaFon's success and strong position in the market largely depend on an effective risk management system. In 2016, we continued to improve our risk management system, focusing on international risk management standards ISO 31000:2009 Risk management – ​​Principles and guidelines, ISO 31010:2009 Risk management – ​​Risk assessment techniques and national standards of the Russian Federation: GOST R ISO 31000:2010 “Management” risk. Principles and guidance" and GOST 31010:2011 "Risk management. Risk assessment methods".

The organizational structure of risk management consists of the following elements:

• Risk management division at MegaFon Head Office, whose functions include:
  • development and implementation of risk management procedures;
  • development and support of the risk management process;
  • development of risk culture;
  • assessing risks for their potential impact on the Company’s goals;
  • developing plans to minimize risks, monitoring the implementation of risk reduction measures;
  • interaction with all structural divisions as part of the risk identification process, conducting interviews and questionnaires;
  • conducting employee training;
  • submitting risk management reports to the Risk Committee and the Audit Committee.
• Risk owners are managers of functions responsible for all aspects of risk management: identifying, assessing risk, developing risk management measures, monitoring risk and the status of measures, and/or providing information for the purposes of monitoring risk and status of measures.
• The Risk Committee at the Head Office is a permanent collegial consultative and advisory body, which includes top management chaired by the General Director and which reviews and makes key decisions on risk management. The activities of the Committee are regulated by the Regulations on the Risk Committee. In 2016, two meetings of the Risk Committee were held, at which important decisions were made to manage key risks.

The Audit Committee under the Board of Directors of PJSC MegaFon reviews reports on risks and the functioning of the risk management system and monitors the effectiveness of risk management.

Risk identification and analysis is carried out at three levels:

• discussion with each department in the form of interviews and questionnaires;
• cross-functional discussions and brainstorming;
• meetings of the Risk Committee held at the Head Office and branches.

At all three levels, risks are assessed for their potential impact on the Company's objectives. Monitoring the implementation of risk minimization measures is carried out using an electronic system, which helps to increase the efficiency of risk management.

Risk management processes are periodically reviewed by the internal audit function and the Audit Committee. The Audit Committee evaluates the effectiveness of the risk management system as a whole, and also makes recommendations on further development of the system.

Development of the risk management system in 2016

In 2016, the Risk Management Division continued to work on the implementation of an internal automated risk management solution based on Oracle Hyperion, which will make risk management more convenient and structured. It was also decided to manage operational risks in the process of reengineering the SAP system and to separate the compliance risk management functionality into a separate area. Compliance risks will be reviewed by the Compliance Committee. In the reporting year, the Company continued to improve its risk culture.

In 2016, in order to increase employee awareness of the risk management process, the thematic information section on risks on the MegaNet internal portal was updated.

Further development of the risk management system

In 2017, it is planned to continue to develop the risk management system, risk culture, and increase the level of compliance with the ISO 31000:2009 standard, primarily in the following areas:

• Employee training.
• Updating the risk management methodology.
• Introduction of risk management into the Company's operations and decision-making process.
• Full implementation of an automated risk management solution based on Oracle Hyperion.
• Improving post-analysis of risks and effectiveness of interventions.
• Work on the implementation of business continuity management in accordance with ISO 22301.
• Integration into the strategic planning process.
• Implementation of a strategy to improve risk culture.

Key aspects of developing a risk-oriented culture

MAIN RISKS AND MEASURES TO MINIMIZE THEM

In its activities, MegaFon takes into account a wide range of risks, which, if realized, could have a negative impact on the Company’s activities. The company takes into account geopolitical, macroeconomic, operational, regulatory, financial and tax risks, and compliance risks. In 2016, new risks emerged related to the regulation of the telecommunications industry: for example, the implementation of a package of anti-terrorism amendments may be associated with the risk of increasing capital expenditures to comply with legal requirements.

From an operational point of view, the high level of competition in the Russian telecommunications market and changes in consumer behavior patterns, on the one hand, put pressure on the Company’s revenue, and on the other hand, lead to additional investments in improving customer service and network quality.

In 2016, risks associated with increased interest in the operator market from players from other industries increased, as well as risks associated with a lack of competencies in new market segments, such as Big Data.

In order to minimize these risks, during the reporting period a decision was made to strengthen competencies for working with Big Data.

The company pays priority attention to improving information security. In order to prevent and minimize risks in this area, a new information security strategy has been developed, and the competencies and functions of responsible departments have been strengthened.

GEOPOLITICAL RISKS

MACROECONOMIC RISKS

OPERATIONAL RISKS

REGULATORY RISKS

FINANCIAL RISKS

COMPLIANCE WITH INTERNATIONAL REGULATIONS

Risk management in the MTS Group complies with the generally accepted conceptual framework of risk management (document “Organizational Risk Management. Integrated Model” of the Committee of Sponsoring Organizations of the Treadway Commission, COSO). The integrated risk management process operates effectively in accordance with the needs of the Group of Companies and international standards. The risk management policy is to minimize unexpected losses from risks and maximize capitalization, taking into account the ratio between risk and return on investment that is acceptable to shareholders and management of MTS Group.

The risk management process has gone through all stages of implementation, automation and integration into the Company’s business processes (strategic and investment planning processes, as well as cross-functional projects and preparation of external reporting), which now makes it possible to identify and take into account risks when making key decisions for guaranteed achieving your goals and strengthening business leadership.

The Risk Management Department of the Corporate Center (RCC) assesses the most significant risks based on a long-term financial model and regularly conducts simulations to obtain key financial indicators taking into account risk and the probability distributions of these indicators. To analyze individual ESD risks, CC uses econometric methods.

The report on the state of risks of the MTS Group is reviewed quarterly by the Risk Committee, at which the Company’s key risks are discussed and collegial decisions are made on the development of measures to mitigate them.

MTS Group management is informed about the entire range of risks to ensure the completeness, quality and comparability of the information provided for each level of decision-making.

Organizational support for risk management

Risk management activities are distributed among the functional divisions of the Company:

• ERM CC is responsible for developing a risk assessment methodology, regularly collecting information and preparing reports with the results of this assessment for the Risk Committee and the Company’s management. ERM CC also exercises operational control of the process and ensures cross-functional interaction between departments within the framework of integrated risk management in the Company. Cross-functional interaction with risk owners in Subsidiaries (DC) is provided by risk coordinators in DC.
• Risk owners are heads of functional departments whose goals are affected by risks. Owners are responsible for analyzing, evaluating, executing and reporting risk management activities as part of the integrated risk management process.
• The Risk Committee makes collegial decisions in the field of integrated risk management.
• The effectiveness of the risk management process is assessed by the Internal Control and Audit Unit, including this information being submitted to the Audit Committee.
• The Audit Committee monitors the effectiveness of risk management, as well as assesses the procedures used by MTS Group to identify key risks and evaluates related control procedures (including loss control procedures and risk insurance) to determine their adequacy and effectiveness.
• The Board of Directors acts directly or through its committees, within its competence, to solve problems in assessing political, financial and other risks affecting the Company’s activities. The MTS Board of Directors delegates control over the effectiveness of risk management to the MTS Audit Committee, and also reviews the reports of the Audit Committee.

Main activities in 2015

Risk Committees of CC and subsidiaries were held.

The Antimonopoly Risk Management Policy stipulated the participation of the Risk Management Department (hereinafter referred to as the RMD) in assessing risks associated with antimonopoly legislation.

ESD assessed the main risks within the framework of the strategic session of the MTS Group.

ESD assessed the risks of investment projects aimed at:

• fixed business development;
• transport subsystem management;
• development of IT infrastructure;
• construction and optimization of the radio subsystem;
• cost optimization;
• development and launch of new services.

ESD conducted risk management training for MTS employees.

Plans for 2016

In 2016, it is planned to regularly update risk information for external reporting and regularly hold Risk Committees. It is also planned to integrate into decision-making processes, including the provision of analytical conclusions on individual projects for functional blocks.

Risk factors

The risk management system is part of the Group’s overall management system and is aimed at ensuring sustainable development as part of the implementation of Sberbank’s Development Strategy 2020. The Group’s risk management system is formed taking into account the requirements of the Bank of Russia and regulations of the Russian Federation, as well as the recommendations of the Basel Committee on Banking Supervision.

The Group is constantly improving its risk management system; There is a consistent implementation and improvement of risk management methods and processes both at the integrated level and at the level of management systems for individual types of risks.

One of the bank’s key achievements in 2017 was obtaining permission to use an approach to assessing credit risk based on internal ratings (IRR). The permit was issued by the Banking Supervision Committee of the Bank of Russia on November 16, 2017 and came into force on January 1, 2018 after the Supervisory Board made a decision to apply the IVR approach.

The transition to PVR will allow Sberbank to more accurately assess credit risk for the purposes of calculating capital adequacy standards, as well as introduce a system of strategic business management taking into account the capital consumed in accordance with the best global practices.

The following is a summary of the Group's risk management. For more detailed information about the Group’s risks, see the report “Information on accepted risks, procedures for their assessment, risk management and capital of the banking group” on the corporate website of Sberbank.

Principles of risk management

The basic principles of risk management are defined in the Risk and Capital Management Strategy of the Sberbank Group, the second version of which was approved by the Supervisory Board in April 2017 (the Strategy can be found here).

Risk Awareness

A decision to carry out any operation is made only after a comprehensive analysis of the risks arising from such an operation.

Managing activities taking into account the accepted risk

Priority areas for development and capital allocation are determined based on an analysis of risk-adjusted performance indicators.

Senior management involvement

The Supervisory Board, the President, the Chairman of the Management Board, the Management Board and other collegial bodies of Sberbank, as well as the supervisory boards and executive bodies of the Group members, regularly review reports on the level of accepted risks and facts of violations of established risk management procedures, limits and restrictions.

Risk Limitation

The Group has a system of limits and restrictions that allows it to ensure an acceptable level of risks within the established Risk Appetite.

Separation of functions, powers and responsibilities

The distribution of functions and responsibilities between the divisions of Sberbank and Group members is carried out in accordance with the principle of “three lines of defense”.

Centralized and decentralized approaches

The Group uses a combination of centralized and decentralized approaches to risk management and capital adequacy to ensure the greatest efficiency.

Use of information technology

Risk and capital adequacy management is based on the use of modern information technologies, which improve the quality and efficiency of decision-making.

Improving methods

Methods for managing risks and capital adequacy are constantly being improved, procedures, technologies and information systems are being improved, taking into account the set strategic objectives, changes in the external environment, and innovations in international practice.

Risk culture

The Group is implementing a project to develop a risk culture, the goals of which are to develop behavior in employees in which they openly discuss and respond to existing and potential risks, and also show intolerance to ignoring, hushing up risks and the risky behavior of others.

Risk culture complements existing formal mechanisms and is an integral part of the integrated risk management system.

The formation of a risk culture occurs through three main channels: the personal example of the manager, bank-wide communications and training. At the end of 2017, 89% of Sberbank employees had completed risk management training programs. Communications between managers and employees on risk culture were carried out in most divisions of Sberbank and covered 80% of the Group’s employees. Similar activities have been started in subsidiary banks. Regular information campaigns are conducted in bank-wide communication channels to promote targeted risk-prudent behavior.

Risk-based motivation system

The Group's remuneration system ensures that the amount of employee remuneration corresponds to the nature and scale of operations performed, performance results, and the level and combination of risks taken.

Information disclosure

All information on risk management and capital adequacy required in accordance with regulatory requirements is subject to timely disclosure.

The concept of acceptable risk involves establishing its limits to which it is necessary to minimize the threats present in the business. Before this, the risk needs to be identified, its factors examined in detail, assessed and analyzed. Risk assessment and analysis play a decisive role as a stage of management technology. This article focuses on valuation activities based on data from the financial statements of an enterprise. In addition, we will consider the assessment in the context of the main threats to the business, without dividing it into investment and operating parts.

Basic methods of risk analysis and assessment

The sequential triad of “identify, evaluate and reduce” expresses the essence of the risk management process in an enterprise. If the identification of risk factors involves the formation of a single ranked list, then the identification of risks can also be considered as the identification of factors, but in relation to a specific area. Risk identification is a procedure for identifying the most significant qualitative and quantitative characteristics of risk by comparing:

• with the amount of expected damage from the occurrence of accompanying events;
• with the likelihood of these events occurring;
• with the capabilities of the company’s activities;
• with the results of specific business processes;
• with the capabilities of functional and production departments of the enterprise, etc.

In other words, risk identification is a recognition procedure in connection with something (amount of damage, probability, type of activity, operation). When the identification stage comes to an end, the output is a set of risk factors, on the basis of which the so-called “initial risk” is initially assessed, that is, the risk of an idea, the risk of a plan for further activity. Further, moving to the stages of assessment and analysis, the intention arises to obtain an analyzed and assessed level of risk, which will make it possible to develop and implement measures to reduce the degree of its danger.

Sequence diagram for analysis and assessment of business risk

Above is a model of the process of analytical and evaluative actions of management technology in the context of the “evaluate” stage. Let’s say that before an in-depth analysis, the identification of risks has been completed, the risk manager has the results of their identification in hand. That is, he gets a qualitative idea of ​​how certain external and internal factors influence the specific risk under study. Next, he will have to select methodological approaches for the next work with risks and implement the stages of detailed analysis and assessment. This implies a choice among several methods of such activities; in this regard, they distinguish:

1. Models based on expert methods.
2. Models that implement financial analysis methods based on financial reporting data.
3. Evaluation and analytical methods implemented based on management reporting data (probabilistic, statistical methods, elements of game theory in risk assessment).

Models of expert assessments will be discussed in a separate article. The material about is devoted to the analysis and assessment of risks using management statistics, probabilistic approaches and game theory. We will dwell in detail on the methods using the results of financial statements and specifically reports of forms No. 1 (balance sheet) and No. 2 (profit and loss statement). In such assessment work, financial management and analysis approaches are actively used.

Using accounting reports in risk analysis

In terms of his professional profile, a risk manager is similar to a project manager from the point of view that he is subject to the same high requirements for proficiency in various areas of management, including financial management and analysis. Essentially, the best basic competence of both specialists is economics and organization of industrial production. This means that the risk manager must be able to read financial statements and master the basic indicators of financial analysis: liquidity, solvency, stability, independence, etc.

Even when thinking about the “risk identification” stage, we noted that when systematically grouping factors, it is important to analyze the documentation available in the company (legal, organizational, financial, technological). And among the first documents that you should pay attention to are financial statements. This information has advantages and disadvantages. Its advantages include the fact that the accounting report complies with such basic rules as continuity, balance, double entry of reflected business transactions. Using financial analysis criteria and models applied to financial reporting, we can see how a specific group of financial risks can be assessed. This includes, in particular:

• price risks;
• property risks;
• risks of financial investment;
• real investment risk;
• tax risk;
• credit risk;
• inflation risk;
• liquidity risk;
• currency risk;
• risk of loss of financial stability and independence;
• risk of bankruptcy.

Potential risks associated with assets of the enterprise balance sheet

For help in analyzing risks based on financial statements, the risk manager turns to the financial department of the organization. Together with the financial service, they initiate a procedure for assessing the above risks. The fact is that almost every item of asset and liability on the balance sheet carries the imprint or potential of risk events. The types of risks are associated with the nature of balance sheet items, and this circumstance allows one to quickly carry out a qualitative analysis of the items to identify an emerging or impending unfavorable situation.

Potential Risks Associated with Income Statement Lines

Above is the form of a standard profit and loss report, in which the blue blocks reflect the types of potential risks that may arise in the enterprise. Risk potential is present in each marked position, based on the nature of the economic elements placed line by line in the report. It is worth noting that regular analysis of not only the balance sheet and profit and loss statement (form No. 2), but also the cash flow statement (cash flow statement) is the direct responsibility of the financial director.

Examples of analysis of financial statements for risks

In modern management practice, accounting statements are often referred to as financial statements. Types of reporting that are intended for external stakeholders include the following.

1. Financial statements prepared for tax authorities, Rosstat authorities, banks and shareholders.
2. Tax reporting.
3. Management reporting for the company's senior management and main owners.

Since management reporting can also be prepared on accounting principles, the composition of accounting reporting is somewhat broader than financial reporting. However, for the sake of objectivity, it should be recognized that these concepts are identical in Russian reality. Let’s assume that, according to the current regulations, the risk manager initiates a qualitative risk analysis based on financial reporting data on a quarterly basis. Let's look at an example of how this can happen.

Let's assume that the analysis is performed by the deputy financial director. It is best to place report data for several reporting periods in one file in Excel format and start tracking the dynamics of changes in the article for each item, delving into analytics if necessary. For example, fixed assets, construction in progress and intangible assets are characterized by price risks, which may be due to:

• with an increase in the purchase price of assets;
• with the cost of a capital construction project exceeding the cost of estimates;
• with the possible need to re-evaluate fixed assets and intangible assets, etc.

The following example concerns the risks of financial investment under the article “Long-term financial investments”. Let's assume that a company has invested in shares of Russian blue chips. This is accompanied by risks of the stock market value of shares, dividend risks, etc. The analyst who conducts the analysis is obliged to record changes in the situation and reflect the risk dynamics in his certificate.

An example of assessing tax risks is associated with a number of asset and liability items on the balance sheet (lines 145, 220, 515, 620) and certain lines of the income statement (lines 141, 142, 150). It is advisable to track these positions:

• together;
• for each tax over time by period;
• on deferred tax assets;
• on deferred tax liabilities.

The financial manager has the opportunity to quickly check possible accounting errors and tax planning reserves. For example, the main criteria for applying for VAT reimbursement from the budget have been met. However, some positions in the sales book are controversial; there is a risk that, as a result of a desk audit, the VAT payable will not be reduced by the Federal Tax Service by the planned amount, and this risk must be recorded by the head of the financial service. All articles of form No. 1 and form No. 2 are processed in a similar way. A comprehensive certificate of qualitative analysis of financial risks is prepared for the risk manager.

Dynamics of development of financial insolvency

For the purposes of this article, the financial insolvency of an organization will be understood as its inability to finance current operating activities and meet its obligations due to the lack of funds necessary for this. Stakeholders inside and outside the company are almost always and for a variety of reasons interested in the question of the viability of the organization. Not only its success in the market, but also the risks of shareholders, investors, and partners of the enterprise depend on this. The risks of a company losing its financial independence, stability, and solvency are synthesized into a complex risk of financial insolvency.

An enterprise, going through the stages of crisis development, does not immediately acquire signs of insolvency. Negative tendencies tend to accumulate gradually. However, accounting (financial) reporting, with regular analysis and evaluation, makes it possible to timely catch a downward trend and develop a strategy for correcting it. Next, we present to your attention a diagram of the dynamics of the development of the financial crisis of a commercial organization, which goes through certain stages of degradation of liquidity and solvency.

Scheme of the dynamics of bankruptcy development and connections between risk assessment models

The laws of nature and business in terms of the growth of a crisis situation are very similar. The problem always comes from a higher system level. When current tasks deviate from the mission and target program, there is a risk of incomplete implementation of the strategy and plan. Such a violation is difficult to define, since routine current tasks are quite far from the strategy, and the connection is not visible. As a rule, external reasons for violations of financial and economic performance indicators are easily found.

However, in 99% of cases the cause is always internal. However, an experienced financier, accustomed to a regular procedure for qualitative risk assessment based on financial statements, will always notice something is wrong in time based on the number of weak signals. As a rule, signals come from interrelated balance sheet items and form No. 2. And when they begin to gradually grow, this indirectly indicates that the beginning of the crisis has arrived or is about to come.

At the moment when the risk to the organization's liquidity becomes obvious, the crisis enters the stage of its active development. During this period, the company is still coping with temporary difficulties in meeting financial obligations. But interruptions in the form of cash gaps are becoming more and more common, on-lending is gradually becoming a common practice, and credit history is deteriorating. It is becoming increasingly difficult to obtain new loans, and the asset structure is deteriorating. Finally, the crisis passes the stage of the threat of bankruptcy. The enterprise finds itself face to face with the risk of complete inability to pay debts to creditors, pay wages and pay off tax arrears.

Composition of risk assessment models

As we have already decided, the first crisis stage in the development of enterprise insolvency occurs latently, that is, hidden from the eyes of the observer. Then, when financial reporting diagnostic indicators show negative trends in asset liquidity, solvency, financial stability and independence, the crisis becomes obvious. In financial management, all these indicators are known. During the period of development, it is generally accepted that financial criteria are built into a hierarchy, which during a crisis turns over from top to bottom and looks like this.

1. Liquidity.
2. Solvency.
3. Sustainability.
4. Profitability.
5. Business activity.

Each enterprise must formulate target normative values ​​for these indicators. By liquidity we consider the ability of an asset to be converted into cash, and the measure of this is time. Therefore, the liquidity of an asset is the rate at which an asset is converted into cash without a significant loss of value. Then what is solvency?

In a number of literary sources, it is equated with the indicator of absolute liquidity, which is calculated as the ratio of the most liquid assets to current liabilities. But even such assets take time to turn into cash. Therefore, solvency is the ability of a company to satisfy at any time the requirements placed on it to fulfill its financial obligations.

Insolvency is evidence of the risk of bankruptcy. This and other criteria for business insolvency are examined during the diagnosis of the structure of the main financial statements. Naturally, the earlier negative trends can be identified, the better, despite the fact that the stage of development of the crisis is still hidden. And the approach to risk assessment should be comprehensive. In this regard, we can talk about a variety of risk assessment models developed by the management school and used in practice.

The main types of models that have become widespread among researchers and practitioners:

• models for risk assessment and liquidity analysis of a commercial organization;
• models for risk assessment and analysis of loss of financial stability;
• integrated approaches to risk scoring and analysis of the company’s financial condition;
• models of rating analysis of financial condition;
• foreign and domestic models for predicting bankruptcy risk.

Classification scheme of complex models for assessing the risk of financial condition

Above is a classification scheme of complex models used at the hidden and obvious stages of a crisis situation that a company may find itself in if this risk is not dealt with. Models for assessing liquidity risk and financial stability are not included in the scheme, since they are not comprehensive. However, their level of significance is high. Thus, the current liquidity ratio is included as the main criterion in almost every complex model.

Methods for assessing liquidity risk

Liquidity as a property of a company, consisting in the ability to cover its obligations with assets without a significant loss of their value, indicates the financial balance of activities. It is assumed that the period for converting assets into cash corresponds to the mandatory period for covering liabilities. There are current, intermediate and absolute types of liquidity.

All balance sheet items, depending on the approximate time frame for converting them into cash, are characterized by a corresponding risk. At the same time, not only the assets, but also the liabilities of the enterprise have the property of liquidity risk. The shorter the period for covering the obligation by its fulfillment, the greater it is. Below are two tables of gradation of liquidity risk for groups of assets and liabilities of the organization.

Model for grouping balance sheet assets by liquidity risk level

Model for grouping liabilities by liquidity risk level

Let's consider the grouping of assets by liquidity risk. Indeed, cash in current accounts in banks and in the cash registers of an organization are the most liquid assets, since they determine its solvency. Short-term financial investments, as a rule, can be quickly (meaning, up to three months) converted into cash. As an example, such assets can be short-term loans, time bills of commercial banks, bonds with a short maturity, etc. The following is an example of grouping sections of the balance sheet of the enterprise PJSC "Remavtomatika" with the assignment of liquidity risk to them.

An example of grouping balance sheet sections according to the degree of liquidity risk of an industrial enterprise

Based on the balance sheet, liquidity risk analysis is also carried out based on the method of using absolute indicators. A comparison is made of asset and liability sections of the balance sheet that are comparable in terms of liquidity risk using the coverage rule. The ratio of the compared values ​​by group determines the type of liquidity and the corresponding risk area. The method is visual and quite simple. Its disadvantages are associated with the “post-mortem” nature of accounting data and the inability to establish the degree of liquidity due to the emphasis on comparison. The evaluation model using absolute indicators is given below.

Model for analyzing and assessing liquidity risk using absolute balance sheet indicators

Liquidity ratios show the ability of a balance sheet asset to cover the shortest-term liabilities: accounts payable and short-term liabilities. The current liquidity ratio has a feature in which assets with a period of transfer into cash in one calendar year are correlated with liabilities that must be repaid within no more than six months. Therefore, the regulatory limit is considered optimal at a level of at least 2.0. Below is a model for assessing liquidity risk using relative indicators.

Model for analyzing and assessing liquidity risk on the balance sheet using relative indicators

Risk of buckling in risk assessment models

The CFO should have a number of questions. Is the company's equity capital sufficient or not to cover non-current assets? Are borrowed capital and current liabilities involved? How much of our working capital do we finance from our own capital? These questions are answered by the indicator “own working capital” (SOC) as the difference between the company’s own capital and non-current assets.

In addition to SOS, financial management also uses the “net working capital” indicator. It answers the question: are equity capital and long-term liabilities enough to cover not only non-current assets, but also part of the working capital? SOS and PSC make it possible to determine the financial stability of an enterprise, the methods of calculation of which are different. For the purposes of this article, we will operate only with the SOS criterion for now. The types of indicators of a company's financial stability are divided into three variations.

1. Absolute financial stability. It is defined as the difference between SOC and “inventory costs” (IC). The “absolute sustainability” indicator tells us that the amount of equity capital is such that it is enough for both non-current assets and the remaining inventory in the warehouse. This stability corresponds to the risk-free zone of the ratio of equity capital and assets. This approach corresponds to the Russian methodology for perceiving equity.
2. Normal stability. In the Western approach, equity capital is considered to be equal in economic nature to long-term borrowed capital. It somewhat reduces the financial stability of the enterprise, but not so critically, so another concept appears - “own and long-term sources” (SDS). SDIs are involved in calculating the normal stability value.
3. Unstable financial condition. If a financier sees that equity capital and long-term borrowed funds are not enough, he is forced to initiate a procedure for attracting short-term loans, which can lead the company to an unstable financial condition. The combination of SDI and short-term loans and credits constitutes the concept of JVI (main source quantities).

Procedural model for analyzing and assessing financial stability based on absolute indicators

This technique has advantages: it is simple, convenient and widespread. However, the model also has disadvantages. Its procedures do not allow for forecasting; the assessment is made on the basis of ex post facto information. In addition, it is impossible to determine the extent of loss of financial stability. Therefore, this model must be supplemented with relative indicators, such as:

• share of working capital in the assets of the enterprise;
• the company's coverage ratio with its own sources of financing;
• capitalization ratio;
• financial independence ratio;
• financial stability ratio.

Review of comprehensive methods for assessing viability

The topic of assessing the risks of enterprise bankruptcy is practically inexhaustible and deserves the attention of more than one article. Within the framework of this material, I will only briefly outline the main ways to assess the risk of financial condition. I'll start with bankruptcy risk scoring models. These methods are distinguished by a scale division of normative ranges of relative indicators into classes or intervals.

As an example, below is the first version of such a model. It contains eight indicators, examining the status of which, the analyst collects points. The company's assignment to the appropriate risk class depends on the total amount of points scored. From the 3rd grade, signs of bankruptcy begin to appear.

Model for a comprehensive risk assessment of financial condition

The development of the presented methodology is carried out by including profitability and business activity criteria in the indicators. Thanks to this model, the level of financial management at the enterprise can be additionally assessed. Models of the so-called rating financial analysis can be very useful, especially if there is a need to evaluate a potential partner when concluding a contract for a significant amount. For the counterparty, the risk of bankruptcy is calculated using weighting coefficients for the indicators included in the calculation. There are four-factor and five-factor models of rating analysis. The following is a version of the five-factor model.

All the shares described above have undoubted advantages. But they have one significant drawback, which is expressed in the fact that no one can completely justify the logic of choosing the composition of indicators and the size of regulatory restrictions. Standards are adopted based on certain theoretical models that do not take into account national specifics, the type of activity of the company, or much else.

Therefore, slightly different methods began to be used, the basis of which was laid by the American economist Edward Altman. New York University professor E. Altman developed a series of models in the 60-80s of the last century after the discovery of the “Z score model” concept. Ten years of observation of a representative group of companies allowed the scientist to build a statistical model based on the criteria that he calculated mathematically for bankrupt companies during the research period. This is how Altman's two-factor model emerged. The scientific idea was widely developed, its interpretations began to appear, including adaptation to Russian economic conditions. Let me give as an example several models for predicting bankruptcy risk:

• five-factor model of E. Altman (1968);
• five-factor model of E. Altman (1978);
• W. Beaver's five-factor model, adapted to Russian conditions;
• domestic two-factor model for predicting bankruptcy.

Key findings and conclusion

In general, the concept of the development of the financial crisis of an enterprise is quite clear and understandable. The methods and models for dealing with the risks of a company’s financial insolvency are simple and are based, as expected, on the most objective information – financial statements. At the same time, there are certain problems of risk analysis that have yet to be solved by future generations of practitioners and methodologists.

1. Accounting and financial reporting in the modern world of tax maneuvers may involve significant distortions. Here we cannot help but recall the peculiarities of the national pastime of “double-entry bookkeeping.” In addition, despite the standardization of accounting, unintentional errors still occur.
2. The very nature of financial reporting is postmortem. Reporting only records the totality of accounting events that have occurred with a minimal lag from current data of one month (at best). As you know, it is impossible to control a “runaway train,” so analysis and assessment are based on tactical trends.
3. The role of two-factor and even three-factor models does not go beyond the indicator assessment and forecast of insolvency risk.
4. Foreign methods do not quite fit the Russian realities of tax legislation, financial law, and historically established business conditions, and therefore require adaptation.
5. The forecast for the risk of financial solvency, taking into account the ongoing crisis situation in the economy of our country and instability, cannot be more than one calendar year.
6. Indicators of financial condition, used as arguments in the formulas for valuation calculations, have the effect of partial duplication of economic nature, since they often contain the same balance sheet items and forms No. 2.
7. These models are distinguished by a certain one-sided focus on assessing the threat of insolvency and do not allow forecasting the company’s entry into the development trend.

I am aware that a good half of the risks of domestic enterprises are somehow related to finance. It is not for nothing that in many companies the initiators of the development of risk management were and remain financial directors. And the structures for coordinating work with risks are part of the financial departments of management companies.

For many years, observing the dynamics of events, I note that the results of the risk assessment process based on the analysis of the reporting structure justify the efforts spent. How many times have we seen the work of specialists and managers who steer businesses away from the dangerous line through timely decisions made. Concluding the article, I would like to note that I believe that in the near future there will be systems with elements of artificial intelligence capable of managing finances based on models of correlation and regression analysis, avoiding the problems and threats mentioned above.

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• Introduction

Chapter 1. Risk management methods

• 1.1 Concept, classification of risks in an enterprise
• 1.3 Enterprise risk assessment

Chapter 2. Risk management using the example of Olis-dent LLC

• 2.1 Brief description of the enterprise Olis-dent LLC
• 2.2 Financial analysis using the example of Olis-dent LLC
• 2.3 Insurance as a method of risk management at the enterprise Olis-dent LLC
• 2.4 Selecting an insurance company and calculating insurance costs
• 2.5 Assessing the effectiveness of insurance at Olis-dent LLC

3. Main directions of risk reduction in Olis-dent LLC

• 3.1 Methods and techniques for reducing financial risks
• 3.2 Determining the prospects of investment and innovation projects in Olis-dent LLC to reduce financial risks
• Conclusion
• Literature
• Applications

Introduction

In any business activity there is always a danger of monetary losses arising from the specifics of certain business transactions. The danger of such losses is financial risks. Therefore, knowledge of the essence of risks and options for managing their reduction determines the relevance of the topic.

Financial managers naturally want to incorporate risk into their work. In this case, different types of behavior are possible, and therefore different types of managers. But the key idea that guides the manager is that the required return and risk should change in the same direction (in proportion to each other). The risk is probable, therefore, its quantitative measurement cannot be unambiguous and predetermined. Depending on which risk calculation method is used, its value may vary.

When evaluating alternative decision options, the manager has to predict possible outcomes. In this case, the decision is made in conditions where the manager can fairly accurately assess the results of each of the alternative decision options. An example would be investments in certificates of deposit and government bonds, when there is a government guarantee and it is known for sure that the interest specified in the terms will be received on the invested funds.

The theory of financial risk management is quite well developed by both domestic and foreign researchers. Publications by such authors as Balabanov I.T., Glushchenko V.V., Limitovsky M.A., Raizberg B.A., Redhead K., Hughes S., Chaly-Prilutsky V.A. are devoted to this topic. .

The authors of the studies introduced a wide range of sources into scientific circulation, collected and analyzed a large volume of factual material, they generalized the experience of assessing financial risks, and studied various options for reducing them.

The object of research in the work is the limited liability company Olis-dent LLC, the main activities of which are the development, production and sale of dental equipment.

The subject of the study is the features and patterns of financial risk management.

The relevance of the study determined the purpose and objectives of the work:

The purpose of the work is to consider the theoretical and practical aspects of financial risk management.

Based on the goal, the following tasks are set in the work:

1. Characterize the essence of risks and give their classification.

2. Identify risk management methods.

3. Study risk assessment at the enterprise.

4. Conduct a financial analysis of Olis-dent LLC.

5. Consider insurance as a method of risk management in Olis-dent LLC, select an insurance company and evaluate the effectiveness of insurance.

6. Study other methods of risk reduction and develop measures to reduce risk at Olis-dent LLC.

The theoretical and methodological basis of the work was the work of classics of economic science, statistics, and management theory.

The thesis work used materials from economic and statistical literature, thematic materials from periodicals. To solve the problems, various mathematical and statistical methods, as well as methods of control theory, were used in the work.

To address the topic at hand, the following structure has been defined: the work consists of an introduction, three chapters, a conclusion and appendices. The title of the chapters reflects their content.

Chapter 1. Risk management methods

1.1 Concept, classification of risks in an enterprise

Risk and income in financial management are considered as two interrelated categories. Any enterprise can be considered as a collection of certain assets in a certain combination. Ownership of any of these assets is associated with a certain risk in terms of the impact of this asset on the overall income of the enterprise.

Analysis and modeling of operations and systems shows that the main properties of any system and operation are the target effect (income), costs (time and resources), risk (danger or safety).

The origin of the term “risk” goes back to the Greek words ridsikon, ridsa - cliff, rock. The word “risk” came into English literature in the middle of the 18th century. from France as the word "risque" (risky, doubtful).

Webster's Dictionary defines "risk" as "the danger, possibility of loss or damage." In Ozhegov’s dictionary, “risk” is defined as “the possibility of danger” or as “an action at random in the hope of a happy outcome.”

It cannot be said that the problem of risk is new. In the 20s In the twentieth century, a number of legislative acts were adopted in Russia containing the concept of production and economic risk. At the same time, there were sound thoughts that the pace of economic development and approaches to risk management are dependent on each other.

Attention to the problem of risk in the studies of Soviet economists was limited due to the fact that the centralized economy assumed compensation for losses arising in some sectors of the planned economy at the expense of other sectors, which usually included industries involved in the production and export of oil and gas. And yet, back in the 30s. Chairman of the State Planning Committee V.V. Kuibyshev noted the need to take risk into account when making decisions in a socialist economy.

On the other hand, in practice, as noted by the Soviet academician A.S. Grinberg, there was an “asymmetry of economic risk,” by which he meant that it is possible to lose greatly by introducing scientific and technological achievements into production, but it is almost impossible to win big. If an enterprise achieves great results, they are artificially taken away from it in favor of the state. On the other hand, failure to comply with the state plan by 1-2% leads to penalties. This situation formed a negative attitude towards risk among Soviet enterprise managers, which limited the development of scientific research in the field of economic risk.

In domestic economic science, risk was completely related to the phenomena of the capitalist economy. Ignoring the problems of risk reached such an extent that the very concept of “risk” was not even included in the encyclopedia “Political Economy”.

The dictionary - reference book for entrepreneurs outlines the concept of “entrepreneur risk” as the possibility of failures and losses in business activities, which, if carelessly or illiterately approach the matter, can lead to undesirable consequences and damage.

Balabanov I.T. Risk means the possible danger of losses arising from the specifics of certain natural phenomena and activities of human society. Raizberg B.A. considers risk as the threat that an economic entity will incur losses in the form of additional expenses in excess of those provided for in the forecast, program of its actions, or will receive income below those for which it expected. Grabovsky P.G. Risk means the likelihood (threat) of an enterprise losing part of its resources, losing income, or incurring additional expenses as a result of certain production and financial activities.

According to Blank, risk is the likelihood of adverse financial consequences in the form of loss of expected investment income in a situation of uncertainty of the conditions for its implementation.

Consideration of definitions of risk showed that risk in most of them is associated with the probability of an event, or is defined taking into account probability. However, such an interpretation makes risk management obviously impossible, since risk management, from the point of view of the above definitions, becomes identical to probability management. Thus making the process of enterprise management spontaneous, devoid of an organizational basis.

Many definitions highlight such a characteristic feature as danger, the possibility of failure. However, this position does not, in our opinion, characterize the entire content of the risk. For a more complete description of the definition of “risk”, it is advisable to find out the content of the concept of “risk situation”, since it is directly related to the content of the term “risk”.

In Ozhegov’s dictionary, the concept of “situation” is defined as “a combination, a set of various circumstances and conditions that create a certain environment for a particular type of activity.” In this case, the situation may facilitate or hinder the implementation of this action. Among various types of situations, risk situations occupy a special place.

The functioning and development of many economic processes are inherent in elements of uncertainty. This causes the emergence of situations that do not have a clear outcome. If it is possible to quantitatively and qualitatively determine the degree of probability of one or another option, then this will be a risk situation.

It follows that the risky situation is associated with statistical processes and is accompanied by three conditions:

1) presence of uncertainty;

2) the need to choose an alternative;

3) the ability to assess the likelihood of the implementation of the selected alternatives.

It should be noted that the situation of risk is different from the situation of uncertainty. A situation of uncertainty is characterized by the fact that the probability of the outcome of a decision or event cannot be established in principle.

Thus, a risk situation can be characterized as a situation of relative uncertainty, when the occurrence of events is probable and can be determined, i.e. in this case, it is objectively possible to assess the likelihood of events supposedly arising as a result of joint activities of partners, counter-actions of competitors or an adversary. In an effort to “remove” a risky situation, the subject makes a choice and strives to implement it. This process is expressed in the concept of risk. The latter exists both at the stage of choosing a solution and at the stage of its implementation.

In both cases, risk appears as a model for the subject to remove uncertainty, a way of practical resolution of a contradiction in the unclear development of opposing tendencies in specific circumstances.

Under these conditions, the formulation of the concept of “risk” given by V.A. is more complete. Chalym-Prilutsky: risk is an action performed under conditions of choice, when in case of failure there is a possibility of being in a worse position than before the choice (than in the case of not performing this action).

An important element of risk is the possibility of deviation from the chosen goal. In this case, there may be deviations of both negative and positive properties. The possibility of positive variance as a result of risk is often characterized in the economic literature as “chance.”

V.V. Shakhov defines risk as the danger of an unfavorable outcome for one expected event, and the possibility of a positive deviation under given parameters is called “chance”. Thus, risk is damage, negative deviation, loss; and chance is a positive deviation, profit.

Inconsistency as a risk feature manifests itself in various aspects. Representing a type of activity, risk, on the one hand, is focused on obtaining socially significant results in extraordinary, new ways in conditions of uncertainty and a situation of inevitable choice. Thus, it allows one to overcome conservatism, dogmatism, and psychological barriers that prevent the introduction of new, promising types of activities and act as a brake on social development. On the other hand, risk leads to adventurism, subjectivism, inhibition of social progress, and to certain socio-economic and moral costs if, in conditions of incomplete initial information about the risk situation, an alternative is chosen without due consideration of the objective laws of development of the phenomenon in relation to which the decision is made. solution.

The contradictory nature of risk is manifested in the collision of objectively existing risky actions with their subjective assessment. Thus, a person who has made a choice, carrying out this or that action, may consider them risky, while other people may regard them as cautious, devoid of any risk, and vice versa.

In the literature, there are three main points of view that recognize either the subjective, or objective, or subjective-objective nature of risk. In this case, the latter prevails - about the subjective-objective nature of risk.

The existence of risk as an objective manifestation of randomness in economic life can be explained from two positions.

On the one hand, any economic phenomenon represents a certain systemic formation, relatively delimited from other similar formations. The set of internal connections underlying such systems is opposed to the set of external connections through which some economic processes are connected with others.

On the other hand, the presence of risk is explained by the manifestation of chance as a result of the intersection of two or more independent, causally determined chains or lines of existence of various economic entities. The internal laws of an economic phenomenon necessarily determine the sequence of its external implementation. This sequence forms a line of cause-and-effect existence of an economic phenomenon.

Uncertainty, being an objective form of existence of the real world around us, is due, on the one hand, to the objective existence of chance as a form of manifestation of necessity, and on the other hand, to the incompleteness of each act of reflection of real phenomena in human consciousness. Moreover, the incompleteness of reflection is fundamentally irremovable due to the universal connection of all objects of the real world and the infinity of their development, although the desire for a complete, absolutely accurate reflection of reality characterizes the direction of human knowledge and existence.

Consequently, a necessary element of the concept of “risk” is the subject who evaluates risk as an objective manifestation of chance. As mentioned above, risk has an objective origin and does not depend on human will and consciousness. However, only as a result of its awareness by the subject of economic activity as uncertainty regarding the quantitative and qualitative characteristics of business results, it turns into a category characterizing economic reality.

Subjective risk assessment is based on the subject’s active knowledge of economic reality and manifests itself as a derivative of his activities. Only in activity is risk awareness possible. The activity of a subject in a particular area removes some of the uncertainty and, thus, reduces the subjective assessment of risk. In addition, people perceive the same amount of economic risk differently due to differences in psychological, moral, ideological principles.

The subject, in his awareness of risk as uncertainty regarding business results, acts purposefully, since objectively manifested risk sets certain boundaries and limits for the subject’s activity. On this basis, the need arises to understand the patterns of risk as an economic reality in order to harmonize the functioning of the subject with them, since its goals are formed in accordance with the logic of the development of reality, and are also objectively determined by the needs of the subject itself and the level of development of production.

It should be noted that not only risk as an objective economic reality affects the subjective assessment of risk, but also the subject influences risk as an objective manifestation of chance.

Such a property of risk as alternativeness is associated with the need to choose from two or more possible options for decisions, directions, and actions. The lack of choice removes the risk situation.

Thus, risk is closely related to the problem of setting enterprise goals and the process of making management decisions. In particular, the concept of risk can be logically woven into normative decision theory.

The following types of uncertainties and risks are considered the most significant:

1) risks associated with the instability of economic legislation and the current economic situation, investment conditions and use of profits;

2) the possibility of introducing restrictions on trade and supplies, closing borders and other foreign economic risks;

3) uncertainty of the political situation, the risk of unfavorable socio-political changes in the country or region;

4) incompleteness or inaccuracy of information about the dynamics of technical and economic indicators, parameters of new equipment and technology;

5) fluctuations in market conditions, prices, exchange rates;

6) uncertainty of natural and climatic conditions, the possibility of natural disasters;

7) production and technical risk;

8) uncertainty of goals, interests and behavior of participants;

9) incompleteness or inaccuracy of information about the financial position and business reputation of enterprises.

The above classification reflects the main sources of uncertainty risks.

The variety of financial risks in their classification system is presented in a wide range. It should be emphasized that the use of new financial technologies, modern financial instruments and other innovative factors lead to the emergence of new types of financial risks.

The classification criterion for financial risks by type is the main parameter for their differentiation in the management process.

In our opinion, to make management decisions it is reasonable to use the classification of financial risks by type given in Table 1.1.

Table 1.1

Classification of financial risks

There are other risk classifications. For example, according to the stages of manifestation, the risk is classified into preoperative and operational. Another classification divides risk into political, economic, social, technological and industry. You can also classify risk according to the completeness of the study (simple and complex), according to sources of occurrence (external and internal), according to financial consequences, according to the nature of manifestation over time (permanent, temporary), according to the level of financial losses (acceptable, critical, catastrophic), according to the possibility of foresight (predictable and unpredictable), if possible, insurance (insurable and not insurable).

Risks in the financial sector largely depend on external factors. In real investments, you can influence a number of factors: the nature of the technology, the manufacturer of the product, the structure of the enterprise and methods of managing the production of the product, the qualifications of management. Unlike purely financial transactions, a project may contain strong, well-managed factors that fundamentally change the investment attractiveness of the project for the better.

Risks can be pure or speculative. Pure risks mean the possibility of a loss or zero result. Speculative risks are expressed in the possibility of obtaining both positive and negative results. Financial risks are speculative risks. An investor, making a venture capital investment, knows in advance that only two types of results are possible for him - income or loss. A feature of financial risk is the likelihood of damage as a result of any transactions in the financial, credit and exchange spheres, transactions with stock securities, i.e. risk that arises from the nature of these operations. Financial risks include credit risk, interest rate risk - currency risk: the risk of lost financial profit.

Credit risks are the danger that a borrower will fail to pay the principal and interest due to the lender. Interest rate risk is the danger of losses by commercial banks, credit institutions, investment funds as a result of the excess of the interest rates they pay on borrowed funds over the rates on loans provided.

Currency risks represent the danger of foreign exchange losses associated with changes in the exchange rate of one foreign currency in relation to another, including the national currency during foreign economic, credit and other foreign exchange transactions.

The risk of lost financial profit is the risk of indirect (collateral) financial damage as a result of failure to implement any activity or interruption of business activities.

Investing capital always involves a choice of investment options and risk. Selecting different investment options often involves significant uncertainty. For example, a borrower takes out a loan, which he will repay from future income. However, these incomes themselves are unknown to him. It is quite possible that future income may not be enough to repay the loan. In investing capital you also have to take a certain risk, i.e. choose one or another degree of risk. For example, an investor must decide where he should invest capital: in a bank account, where the risk is small, but the returns are small, or in a more risky, but significantly profitable venture. To solve this problem, it is necessary to quantify the amount of financial risk and compare the degree of risk of alternative options.

Financial risk, like any risk, has a mathematically expressed probability of loss, which is based on statistical data and can be calculated with fairly high accuracy. To quantify the amount of financial risk, it is necessary to know all the possible consequences of any individual action and the likelihood of the consequences themselves. Probability means the possibility of obtaining a certain result. In relation to economic problems, the methods of probability theory come down to determining the values ​​of the probability of the occurrence of events and to selecting the most preferable from possible events based on the largest value of mathematical expectation. In other words, the mathematical expectation of an event is equal to the absolute value of this event multiplied by the probability of its occurrence.

The probability of an event occurring can be determined by an objective method or a subjective one. The objective method of determining probability is based on calculating the frequency with which a given event occurs.

The subjective method is based on the use of subjective criteria, which are based on various assumptions. Such assumptions may include the assessor's judgment, personal experience, an expert's assessment, the opinion of a financial advisor, etc.

The magnitude of risk or degree of risk is measured by two criteria:

1) average expected value;

2) variability (variability) of the possible result.

The average expected value is the value of the event magnitude that is associated with an uncertain situation. The average expected value is a weighted average of all possible outcomes, where the probability of each outcome is used as the frequency or weight of the corresponding value. Average expected value measures the outcome we expect on average.

1.2 Risk management methods. Insurance as a risk management method

There is no entrepreneurship without risk. The greatest profit, as a rule, comes from market transactions with increased risk. However, everything needs moderation. The risk must be calculated to the maximum permissible limit. As is known, all market assessments are multivariate in nature. It is important not to be afraid of mistakes in your market activities, since no one is immune from them, and most importantly, not to repeat mistakes, constantly adjust the system of actions from the standpoint of maximum profit. The main goal of management, especially for the conditions of today's Russia, is to ensure that in the worst case scenario we can only talk about a slight decrease in profits, but in no case is there any question of bankruptcy. Therefore, special attention is paid to the continuous improvement of risk management - risk management.

In a market economy, producers, sellers, and buyers act independently in competitive conditions, that is, at their own peril and risk. Their financial future is therefore unpredictable and difficult to predict. Risk management represents a system for assessing risk, managing risk and financial relations arising in the business process. Risk can be managed using a variety of measures that make it possible to predict the occurrence of a risk event to a certain extent and take timely measures to reduce the degree of risk.

In Russian practice, the risk of an entrepreneur is quantitatively characterized by a subjective assessment of the expected value of the maximum and minimum income from capital investment. The larger the range between the maximum and minimum income with equal probability of receiving them, the higher the degree of risk. Risk is taking action in hopes of a happy outcome. An entrepreneur is forced to take risks by the uncertainty of the economic situation, the unknown conditions of the political and economic situation and the prospects for changing these conditions. The greater the uncertainty of the business situation when making a decision, the higher the degree of risk.

The degree and magnitude of risk can actually be influenced through the financial mechanism, which is carried out using the techniques of strategy and financial management. This unique risk management mechanism is risk management. Risk management is based on the organization of work to identify and reduce the degree of risk.

Risk management represents a system for managing risk and economic (more precisely financial) relations arising in the process of this management, and includes the strategy and tactics of management actions.

Management strategy refers to the directions and methods of using means to achieve a goal. Each method has a specific set of rules and restrictions for making the best decision. Strategy helps to concentrate efforts on various solution options that do not contradict the general line of the strategy and discard all other options. After achieving the set goal, this strategy ceases to exist, since new goals put forward the task of developing a new strategy.

Tactics are practical methods and techniques of management to achieve an established goal in specific conditions. The task of management tactics is to select the most optimal solution and the most constructive management methods and techniques in a given economic situation.

Risk management as a management system consists of two subsystems: a managed subsystem - the object of management and a control subsystem - the subject of management. The object of control in risk management is risky capital investments and economic relations between business entities in the process of risk realization. Such economic relations include connections between the policyholder and the insurer, the borrower and the lender, between entrepreneurs, competitors, etc.

The subject of management in risk management is a group of managers who, through various options for their influence, carry out the purposeful functioning of the management object. This process can only be carried out if the necessary information circulates between the subject and the control object. The management process always involves the receipt, transmission, processing and practical use of information. Acquiring reliable and sufficient information in specific conditions plays a major role, since it helps to make the right decision on actions under risk conditions. Information support consists of various types of information: statistical, economic, commercial, financial, etc.

This information includes information about the likelihood of a particular insured event, event, the presence and magnitude of demand for goods, for capital, about the financial stability and solvency of its clients, partners, competitors, etc.

He who owns the information owns the market. Many types of information constitute the subject of a trade secret and can be a type of intellectual property, which means they can be made as a contribution to the authorized capital of a joint-stock company or partnership. Having sufficient and reliable business information at the disposal of the financial manager allows him to quickly make financial and business decisions. This leads to reduced losses and increased profits.

Any management decision is based on information, and the quality of this information is important, which should be assessed when it is received, and not when transmitted. Information now loses relevance very quickly; it should be used promptly.

A business entity must be able not only to collect information, but to store and retrieve it if necessary. The best file cabinet for collecting information is a computer that has both good memory and the ability to quickly find the information you need.

Risk management performs certain functions.

The following risk management functions are distinguished:

The management object, which includes the organization of risk resolution; risky capital investments; work to reduce the risk; risk insurance process; economic relations and connections between subjects of the economic process.

Subject of management, within which forecasting, organization, coordination, regulation, stimulation, control.

Reducing financial risk involves taking organizational measures to help prevent losses. Taking into account risk involves accepting possible losses and planning their financing when justifying an investment decision. Accordingly, risk management tools include risk reduction tools and risk accounting tools.

Risk management becomes relevant after a risk problem is identified. However, P. Drucker draws the attention of managers to the fact that results can be achieved by taking advantage of opportunities, and not by solving problems. All that a person who sets out to solve problems can hope for is the restoration of normalcy. At best, one can only hope to remove the restrictions that prevent a business from achieving results.

Therefore, risk management affects the efficiency of any operation and the entire financial and economic system.

The high level of costs for control and risk management necessitated a systematic approach to risk management.

V.V. Glushchenko highlights the following essential points in a systematic approach to risk management:

1. The goal of ensuring operational safety is systemic parallel protection against various types of risks. Risk management should strive to balance objectives.

2. Risks that have various sources and are associated with one object are considered as a single set of factors affecting the efficiency of resource use.

3. Risk management is concerned with the efficiency of an operation or any production system.

4. To reduce risk at various cycles (stages) of the enterprise, a set of measures is developed.

5. Risk management activities are considered as a single system.

Thus, a systematic approach to risk management allows an economic entity to effectively allocate resources to ensure security.

Risk management can be characterized as a set of methods, techniques and measures that allow, to a certain extent, to predict the occurrence of risk events and take measures to eliminate or reduce the negative consequences of the occurrence of such events.

To reduce risk in financial management, it is advisable to use a number of organizational risk management tools to influence certain aspects of the enterprise's activities.

The variety of reduction methods used in practice can be divided into 4 groups:

1) methods of avoiding risk;

2) methods of risk localization;

3) methods of risk dissipation;

4) risk compensation methods.

Risk reduction methods corresponding to each group are given in Table 1.2.

Table 1.2

Methods to reduce financial risk

Risk avoidance methods are the most common in business practice. These methods are used by entrepreneurs who prefer to act without risk. Managers of this type refuse the services of unreliable partners and strive to work only with counterparties that have convincingly proven their reliability - consumers and suppliers. Business entities that adhere to “risk aversion” tactics refuse innovative and other projects, the confidence in the feasibility or effectiveness of which raises even the slightest doubt.

Another possibility for avoiding risk is to try to transfer the risk to some third party. For this purpose, they resort to insuring their actions or searching for “guarantors,” completely transferring their risk to them. Insurance of probable losses not only serves as reliable protection against unsuccessful decisions, but also increases the responsibility of business managers, forcing them to take the development and adoption of decisions seriously and regularly carry out preventive protective measures. The method of “searching for guarantors” is used by both small and large enterprises. Only the functions of a guarantor for them are performed by different entities: for the first - large companies, for the second - government bodies. In this case, as in other cases, it is important to compare the fee for transferring risk and the benefits acquired.

Risk localization methods are used in those relatively rare cases when it is possible to sufficiently clearly and specifically isolate and identify sources of financial risk. By identifying the economically most dangerous stage or area of ​​activity, you can make it controllable and thus reduce the overall risk level of the enterprise. Similar methods are used by many large companies when introducing innovative projects, developing new types of products, the commercial success of which is highly doubtful. To implement such projects, subsidiaries are created, so-called. venture enterprises within which the risky part of the project is localized. In less complex cases, a structural unit is formed in the structure of the enterprise for the implementation of risky projects. At the same time, in both cases, the conditions for effectively connecting the scientific and technical potential of the parent company are preserved.

Risk dissipation methods are more flexible management tools. One of the main methods of dissipation is to distribute risk by combining (with varying degrees of integration) with other participants interested in the success of a common cause. An enterprise has the opportunity to reduce its own level of risk by involving other enterprises as partners in solving common problems.

Risk compensation methods involve the creation of a hazard prevention mechanism. They are, as a rule, more labor-intensive and require extensive preliminary analytical work, the completeness and thoroughness of which determines the effectiveness of their application.

The most effective method of this type is the use of strategic planning in the activities of the enterprise. It, as a means of risk compensation, is effective when the strategy development process permeates all areas of the enterprise’s activities, including financial ones. Full-scale strategic planning actions can remove most of the uncertainty, make it possible to predict the emergence of bottlenecks in the operating and financial cycles, prevent the weakening of the enterprise’s position in its market sector, identify in advance the specific profile of the enterprise’s risk factors, and, therefore, develop in advance a set of compensating measures.

Let's look at the basic techniques for reducing risk.

Diversification is the process of distributing invested funds between various investment objects that are not directly related to each other, in order to reduce the degree of risk and loss of income; diversification allows you to avoid some of the risk when distributing capital between various types of activities (for example, an investor purchasing shares of five different joint-stock companies instead of shares of one company increases the likelihood of receiving an average income by five times and, accordingly, reduces the degree of risk by five times). Gain additional information about choices and results. More complete information allows for an accurate forecast and reduced risk, making it very valuable. Limitation is the establishment of a limit, that is, maximum amounts of expenses, sales, loans, etc., used by banks to reduce the degree of risk when issuing loans, by business entities to sell goods on credit, provide loans, determine the amount of capital investment, etc. . With self-insurance, an entrepreneur prefers to insure himself rather than buy insurance from an insurance company; self-insurance is a decentralized form, the creation of natural and monetary insurance funds directly in business entities, especially in those whose activities are at risk; The main task of self-insurance is to quickly overcome temporary difficulties in financial and commercial activities. Insurance is the protection of the property interests of business entities and citizens upon the occurrence of certain events at the expense of monetary funds formed from the insurance premiums they pay. Legal norms of insurance in the Russian Federation are established by law.

Insurance should be considered in more detail. It represents an economic category, the essence of which is the distribution of damage among all insurance participants. This is a kind of cooperation to combat the consequences of natural disasters and contradictions within society that arise due to economic relations between members of society. Insurance performs four functions: risk, preventive, savings, control. The content of the risk function is expressed in risk compensation. As part of this function, there is a redistribution of monetary value between insurance participants in connection with the consequences of random insurance events. The risk function of insurance is the main one, because insurance risk is directly related to the main purpose of insurance to compensate for material damage to victims.

The purpose of the preventive function of insurance is to finance, from the insurance fund, measures to reduce the insurance risk. The content of the savings function is that with the help of insurance, funds are saved for survival. This saving is caused by the need for insurance protection of the achieved family wealth. The essence of the control function is expressed in control over the strictly targeted formation and use of insurance fund funds.

Insurance can be provided in compulsory and voluntary forms. Compulsory insurance is insurance carried out by force of law. Expenses for compulsory insurance are included in the cost of production. Voluntary insurance is carried out on the basis of an agreement between the policyholder and the insurer.

The financial manager is constantly faced with the problem of choosing sources of financing. The peculiarity is that servicing one or another source costs the enterprise differently. Financial decisions will be accurate to the extent that the information is objective and sufficient.

The level of objectivity depends on the extent to which the capital market corresponds to an efficient market. Risk management is based on a targeted search and organization of work to reduce the degree of risk, the art of obtaining and increasing income in an uncertain economic situation. The ultimate role of risk management is fully consistent with the target function of entrepreneurship. It consists in obtaining the greatest profit with an optimal ratio of profit and risk.

1.3 Enterprise risk assessment

Risk assessment at the enterprise is carried out by a risk assessment manager. He develops, advises and manages risk management programs and loss prevention activities to ensure maximum protection of corporate assets and capital. Conducts investigations and reports on accidents and incidents related to the company's products, and then coordinates the actions of insurance companies and lawyers. Reviews and analyzes data and develops programs to minimize risks. Monitors compliance with safety regulations and ensures that the company's products comply with industry standards and market requirements.

There are several approaches to assessing risk at an enterprise. Let's look at some of them.

The main task of the first of the risk assessment methods under consideration is their systematization and the development of an integrated approach to determining the degree of risk affecting the financial and economic activities of the enterprise. The following risk assessment algorithm is proposed, which is shown in Fig. 1.1.

All risk researchers do not pay sufficient attention to assessing the quality of the information with which they assess risk.

Rice. 1.1. Flowchart of a comprehensive risk assessment

Requirements for the quality of information should be as follows:

Reliability (correctness) of information - a measure of the proximity of information to the original source or accuracy of information transmission;

Objectivity of information is a measure of how information reflects reality;

Unambiguity;

Order of information - the number of transmission links between the primary source and the end user;

Completeness of information - a reflection of the exhaustive nature of the compliance of the information received with the purposes of collection;

Relevance - the degree of approximation of information to the essence of the issue or the degree of correspondence of information to the task;

Relevance of information (significance) - the importance of information for risk assessment;

Cost of information.

It is proposed to establish a relationship between risk and the quality of information used to assess it. It is suggested that the likelihood of the risk of making a poor-quality (unprofitable) decision depends on the quality and volume of information used. This assumption is taken from neoclassical risk theory. According to this theory, if there are several options for making a decision (with equal profitability), the decision with the lowest probability of risk (fluctuation) is chosen. It can be assumed that even if there are several options with the same profit, a decision is chosen that is based on better information, that is, there is a connection between risk and information.

In Fig. 1.2. shows the expected relationship between the probability of risk of making a poor-quality (unprofitable) decision and the volume/quality of information.

A high probability of risk occurrence corresponds to a minimum of quality information.

Figure 1.2. Dependence of risk and information

To assess the quality of information, it is proposed to use Table 1.3.

Table 1.3

Assessing the Information Used

This table allows you to analyze any information and clearly verify its quality. Numbers 1-10 at the top of the table indicate the quality of information: the better the information, the higher the number it is assigned. The result of the analysis can be the final value of information quality, which is found as an arithmetic mean.

Fixation of risks. When assessing financial and economic activities, it is proposed to record risks, that is, limit the number of existing risks using the principle of “reasonable sufficiency”. This principle is based on taking into account the most significant and most common risks for assessing the financial and economic activities of an enterprise. It is recommended to use the following types of risks: regional, natural, political, legislative, transport, property, organizational, personal, marketing, production, settlement, investment, currency, credit, financial.

Drawing up an algorithm for the decision to be made. This stage in assessing the risks of financial and economic activity is intended for the gradual division of the planned solution into a certain number of smaller and simpler solutions. This action is called drawing up a solution algorithm.

Qualitative risk assessment. Qualitative risk assessment implies: identifying the risks inherent in the implementation of the proposed solution; determination of the quantitative structure of risks; identification of the most risky areas in the developed decision algorithm.

To carry out this procedure, it is proposed to use a qualitative analysis table. This table shows the algorithm of actions when making a decision in rows, and previously fixed risks in columns. So, when deciding to place new base stations at one of the communications enterprises, the risk assessment may look like this (see Table 1.4).

Table 1.4

Qualitative risk assessment

After compiling this table, a qualitative analysis of the risks inherent in the implementation of this solution is carried out.

The main goal of this assessment stage is to identify the main types of risks affecting financial and economic activities. The advantage of this approach is that already at the initial stage of analysis, the head of the enterprise can clearly assess the degree of riskiness based on the quantitative composition of the risks and already at this stage refuse to implement a certain decision.

Quantitative risk assessment. It is proposed to base the quantitative risk assessment on the methodology used when conducting audits, namely: risk assessment based on control points of financial and economic activities. The use of this method, as well as the results of qualitative analysis, make it possible to conduct a comprehensive assessment of the risks of the financial and economic activities of enterprises.

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