Strategic financial management risk assessment decisions Essay

Strategic financial management risk assessment decisions - Essay Example The recent global recession gives a reason to the industries to evaluate the risks involved in any kind of investment. Even when the company is not making losses, assessment of its value addition abilities is important. It also helps in understanding the company’s competitive advantages by optimizing the resources. Assessment of risk is a method of avoiding risk. Not only a preventive measure, risk assessment is a way of survival for the companies. Before any investment proper assessment of the returns of flow of returns over an estimated time period is to be calculated. The appropriate strategy for the companies is to calculate the rate of return on its assets and equity held by the company. a suitable financial management strategy also finds its place in the performance data of the firm. The multi-national firms are always exposed to different kinds of risks including increase in energy and commodity costs. For these firms utilizing resources optimally becomes a challenge at every moment.Aim and objectivesThe paper aims at addressing the different complexities and challenges faced by different firms in the process of risk assessment and how they take their daily decisions based on this. The following objectives need to be addressed:1.  To evaluate why risk management is a necessity for any company in any given industry. (Through the literature review/ qualitative survey)2.  To observe how the market volatility (can be quantified as risk) can affect any investment made by the firm. (Quantitative method)