Exploration of Key Points of Risk Management in Corporate Financial Activities
DOI:
https://doi.org/10.54691/8te21g63Keywords:
Corporate finance, risk management, financial risk, internal control, hedging, liquidityAbstract
Financial activities of the company are exposed to the risk of the market, credit, liquidity, operation and compliance. This paper studies the main links in risk management of corporate finance by examining how enterprises identify and assess financial risks, control risks, monitor risks and report on risks. Based on the above analysis, effective risk management is a multi-faceted approach, and several links need to be built among governance, internal controls, hedging, liquidity planning, scenario analysis and continuous monitoring. Based on recent academic research and institutional guidance, the five main contents of this paper are: risk identification, quantitative assessment, selection of mitigation strategies, design of internal controls, and continuous supervision. Therefore, according to this paper, to manage corporate financial risks effectively, the entire business plan of the company needs to incorporate risk control, set appropriate limits on risk-taking, make decisions based on data, and strengthen the responsibilities of the board of directors.
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