Risk assessment for the intra-corporation calculations

The paper examines one of the main reasons of the currency risk that consists in the unreasonable changes of the exchange rates. The split of the currency risk into operational, translational, and economic is done. The methods of control of risks emergence and reduction of their impact on the final financial result of TNCs are determined. The definition of the «risk of intra-corporation calculations» is proposed as the probability of losses related to cash flows as a result of defects or errors in the internal processes. Classification of the sources of intra-corporation calculations risk is proposed. The integrated use of the methods of analogies, sensitivity, and simulation modeling for quantitative risk analysis of losses is proposed. The formula of evaluation of the future value of money in the intra-corporation calculations is improved.

multinational company, overseas divisions, intra-corporation calculations, risk management strategy, currency risk, methods of risk assessment, exchange rate, risk assessment