Thorough Financial Analysis for a better Risk Management

In recent years, the significance of financial risk management has been progressively highlighted by the organizations, especially after the financial crisis of 2007-08.  Due to inadequate information or negligence in identifying the risk, several investment companies face higher risks associated with their investment, which leads to financial distress or bankruptcy. This article aims towards finding measures for the identification, evaluation, analysis, and monitoring of risks that can be implemented by the various firms to cope up with their internal financial risks. It is because to generate higher returns on investment it is important for the organization to understand the risks associated with the investment and manage them accordingly. Therefore, to manage the financial risks associated with the investment, the organization needs to go through the risk management process which involves risk identification, risk analysis and evaluation, risk response and risk monitoring. Moreover, we will be discussing on the three categories of risk named as profitability, solvency and liquidity, which are one of the most important internal financial risks that medium sized investment company experiences.