Optimizing Risk Structure in Connection with the Corporate Life Cycle and Sector Cyclicity

Optimizing Risk Structure in Connection with the Corporate Life Cycle and Sector Cyclicity

Článek Scopus

Entrepreneurial activities and thus also investments are connected with two kinds of risks, namely with the operational and financial risk. Both of them are dependent especially on the corporate life cycle and on the sector sensitivity to the economic cycle. The main aim of this article is to propose a methodology supporting managers and investors when estimating the shares of operational and financial risks in the entrepreneurial risk with taking into account the corporate life cycle and the sector sensitivity to the economic cycle. This methodology is subsequently applied in a selected company in the form of a case study and thus their results prove its practical applicability for both financial managers and potential investors as decision makers. This study relies on both secondary and primary data that were collected using databases and a semi-structured questionnaire. The data were processed by using descriptive statistical methods and a case study. The proposed methodology considers the actual phase of the corporate life cycle and the degree of sector sensitivity to the economic cycle. Determining the risk structure should simplify the risk management and subsequently raise the capital access. The methodology also contributes to investment decision-making, because the investors can assess investments with regard to their risk profile.

Entrepreneurial activities and thus also investments are connected with two kinds of risks, namely with the operational and financial risk. Both of them are dependent especially on the corporate life cycle and on the sector sensitivity to the economic cycle. The main aim of this article is to propose a methodology supporting managers and investors when estimating the shares of operational and financial risks in the entrepreneurial risk with taking into account the corporate life cycle and the sector sensitivity to the economic cycle. This methodology is subsequently applied in a selected company in the form of a case study and thus their results prove its practical applicability for both financial managers and potential investors as decision makers. This study relies on both secondary and primary data that were collected using databases and a semi-structured questionnaire. The data were processed by using descriptive statistical methods and a case study. The proposed methodology considers the actual phase of the corporate life cycle and the degree of sector sensitivity to the economic cycle. Determining the risk structure should simplify the risk management and subsequently raise the capital access. The methodology also contributes to investment decision-making, because the investors can assess investments with regard to their risk profile.

monetary policy, business cycle, macroeconomics, microeconomics, management, corporate life cycle, financial risk, operational risk, investment decision-making, risk management

monetary policy, business cycle, macroeconomics, microeconomics, management, corporate life cycle, financial risk, operational risk, investment decision-making, risk management

KONEČNÝ, Z.; ZINECKER, M.

2017

08.06.2016

Mendel University Press

Brno

1211-8516

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis

64

3

Česká republika

949

959

11

https://acta.mendelu.cz/64/3/0949/

http://hdl.handle.net/11012/70185

actaun_2016064030949