THE IMPORTANCE OF EVALUATION OF RISK MANAGEMENT IN BUSINESS

• Main Authors: SLOBODAN POPOVIĆ, JELENA TOŠKOVIĆ, RAJKO MACURA, JUGOSLAV ANIČIĆ, DUŠAN ANIČIĆ
• Format: Article
• Language: English
• Published: Academica Brâncuşi 2015-10-01
• Series: Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie
• Subjects: management; value; money means; risc; financial situation
• Online Access: http://www.utgjiu.ro/revista/ec/pdf/2015-05/14_Slobodan%20Toskovici.pdf

Economies with dominant private ownership and developed market institutions build their prosperity on a firm`s goal function in a form of maximization owner`s wealth. Financial situation of business organization is most important indicate that shows level of financial health. The creation of value for the owners imply two matters simultaneously competitive advantage and the evaluation of economic effects. Among economic activities, establishes the different types of addiction. In this work authors draw attention to two categories: the functional and stochastic. Case studies will be cash flows of investment and the contribution of the stochastic component of the risk of enterprise value. Methodological dominated analytical and descriptive methods. Management in the process of evaluation of investment seen what happens behind the projections of cash flows and estimates of available chances for possible modifications. The purpose of the discussion in this section refers to the warning that the application of the rules of net present values does not mean the completion of the management process at the moment of the decision on the selection of investments. In this study, we analyze the influence of stochastic risk in the creation of enterprise value, especially if the risk is managed improperly. In this connection, the starting hypothesis is that adequately compensate for risk has a positive effect on new investments and reduce the antagonism of shareholders and other creditors of the company.