News
Has corporate financial analysis been too focussed on past financial performance rather than an assessment of risks facing businesses? Are we living at a time of increasing numbers of extreme risks that have been underestimated? How will recent extreme events impact the pricing of risk and potential losses in corporate insolvencies?
The video in this post […]
In the IMF World Economic Outlook update, January 2019 https://www.imf.org/en/Publications/WEO/Issues/2019/01/11/weo-update-january-2019
it was stated that “….Risks to global growth tilt to the downside. An escalation of trade tensions beyond those already incorporated in the forecast remains a key source of risk to the outlook. Financial conditions have already tightened since the fall. A range of triggers beyond escalating […]
As we are at a late stage of the current economic cycle we will start seeing more companies facing financial distress.
Combined with the rapid and disruptive changes in the business environment, losses on corporate credit exposures may be significantly higher than in previous economic cycles. So as part of a corporate risk analysis it is […]
….Companies will be exposed to foreign exchange rate risks.
……Traditional Corporate Finance theory is that, as debt is a cheaper form of raising capital than equity, a company should use leverage to enhance equity returns.
Having some debt is understandable. Companies will have foreign exchange exposures . However at a time of uncertainty and rapid change in the […]
Traditional methods of measuring financial performance were mostly developed at a time when change was more gradual. In today’s rapidly changing and disruptive business environment, the traditional methods of financial performance analysis may not be as effective as they once were in the past… This begs the following questions:
1. To what extent are the traditional […]
In an attempt to provide more information to lenders and investors financial statements and associated notes are often lengthy.However, the volume of information and the way in which it is presented can be confusing, particularly with groups with complex ownership structures and substantial intragroup transactions. Even worse, as there is scope for how the items […]
It’s not just about the numbers! If you have relied purely on the quantitative aspects of risk analysis, you are concentrating on the results not the cause.
To properly assess risk in a business also requires a detailed evaluation of the qualitative risks.
Businesses have to be able to survive and prosper in a range of economic, […]
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I went out for a coffee and started reading various news articles
A selection of what I read
Reports in a newspaper of potential major store closure in local shopping mall
Patisserie Valerie reported to be experiencing financial problems and reports of alleged accounting manipulation https://www.bbc.co.uk/news/business-45824285
A number of major Equity Indices showing sharp falls this week
The IMF Global […]
This won’t be the last article on Trade Wars! Much of the commentary has, understandably, focused on the adverse consequences, and uncertainties arising from, Trade Wars. An interesting article published by the World Economic Forum entitled “Trade Wars won’t fix globalization. Here’s why” can be accessed via this hyperlink https://www.weforum.org/agenda/2018/06/trade-wars-wont-fix-globalization-tariffs/
I believe that the discussions on […]
