here’s a trick i just thought of to remember the types of risks - maybe i’m insane, maybe you’ll find it helpful: to remember all the risks, think of an income statement and work your way down and through thinking of all of the steps in the statement you should be able to come up with the list of 11 overall *below is how i remember them and there are some overlaps*. all this is is an simple way to remember the types of risks an organization faces, not where and how they face them persay. Revenue = market risk (1) and credit risk (2) COGS = hersatte (settlement) (3), fx risk (4) , credit risk, market risk SG&A = operation risk (5), regulatory risk (6), legal risk (7), accounting risk (8) Interest exp = market risk, liquidity risk (9), tax = tax risk (10) Earnings = model risk (for some reason i think of modelling earnings, weak connection but (11)
you just sent shivers down my spine…
good or bad shivers?
Striker, I really, really appreicate you sharing this…however, I thought I am done with financial statements :(. the mere thought of using financial statement to remember risk factors scares me. But, thanks, truly!!!
bad… anything with COGS scares me after FCFE, FCFF, etc… from last year…
MWAHAHAHAH