Currency risk
The possibility of losing profits due to currency fluctuations is a significant risk factor for companies. For those who purchase goods and raw materials abroad, the fall of the ruble can be a threat, while for exporters it is an advantage.
An example of financial risk management: a company purchases dye and fragrance in China. The cost of a batch of raw materials is $1,000. On March 15, 2022, it cost the company 115 thousand rubles, and on September 15, 2022 - 60 thousand rubles. For the importer, such a decrease in the exchange rate is a favorable circumstance.
If the company were to sell its products abroad, its income could be reduced by almost half with the price in foreign currency remaining unchanged.
One way to minimize currency engineer data package risks is to regularly purchase raw materials in small batches. This method allows you to smooth out possible price fluctuations through constant purchases.
In addition, you can find a supplier offering the necessary goods for rubles. The supplier does not necessarily have to be a manufacturer. For example, you can cooperate with an enterprise that was able to fill the warehouse with goods at lower prices.
Risk of loss of liquidity
Liquidity is the ability of an asset to be converted into cash quickly. Liquidity risk is the likelihood that a product will no longer be in demand and cannot be sold successfully.
In the past, many people preferred to wash their cars by hand, using hand wash shampoos. This product was diluted in water and a sponge was soaked in the resulting liquid. However, over time, this product began to lose popularity to a contactless product that is applied using a special nozzle. Therefore, companies that still had canisters of hand wash shampoo began to write them off due to loss of liquidity.
Risk of loss of liquidity
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This risk did not go unnoticed by those who purchased pagers and spinners during their peak popularity. When interest in these devices faded, the products turned out to be useless. Government interventions can also affect the liquidity of goods. Modern businesses are moving to online cash registers, so cash register manufacturers who did not have time to adapt were forced to leave the market.
Methods of managing the financial risk of liquidity loss:
Developing market forecasting skills.
Distribution of investment between several goods.
Monitoring changes in legislation.