Stress Testing as a Method of Forecasting and Financial Risk Assessment of a Commercial Enterprise
Journal Title: Бізнес Інформ - Year 2014, Vol 7, Issue 0
Abstract
The purpose of this paper is the research and development of stress-testing tools for assessing and predicting the degree of financial risks on the financial position and capital structure of commercial enterprise. As a result of studies, the authors developed a procedure for conducting stress testing for trade, which consists of four phases, namely: identification (identification) of financial risks; development of the financial model of the outlet; the development of stress-test scenarios; calculation of the stress tests and the interpretation of results. As a financial enterprise model it was proposed to use a simulation model of the balance, based on the capital structure of the company, presented as a source of funds and their investments. It was proved that to predict the effects of financial risks on the capital structure in the financial model it is necessary to analyze the sources of funds of the company and their investments in the context of the degree of liquidity and maturities. Also, the analysis of accounts receivable is advantageously carried out with the indicator of the level of reservation. It was suggested to use three types of stress-test scenarios that differ by the impact of risk factors on the parameters of the financial model (base, negative and critical). The scenarios for stress testing for trade were presented. The study revealed that the proposed approach provides a predictive assessment of the level of losses in the case of the implementation of financial risks. The results can be used to improve procedures predict the effects of financial risks on the capital structure using stress testing for both a commercial enterprise and companies in other industries.
Authors and Affiliations
Tetyana Yakhina, Viktoriya Foshchan
Keywords
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