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ERM – Page 8 – Strategy @ Risk

Strategy @ Risk

Tag: ERM

  • How to take advantage of Strategy@Risks services

    How to take advantage of Strategy@Risks services

    The purpose of the modelling is to as thoroughly as possible describe the company’s present economic and financial situation, and its state throughout the forecast period.

    The S@R financial simulation model can simulate the uncertainty and risk in various tax regimes, economic and fiscal write off. Calculate tax; incorporate depreciation rules to calculate deferred tax, any tax benefits related to forward carry losses. Forecast results from different financial strategies, strategies for dividends and repurchase of shares etc. Working with multiple currencies, currency risk and translation risk (hedge), for global clients.

    The reports produced from the Strategy@Risk starts from a complete set of information collected from the internal accounts, financial accounts, or from a company specific model.

    Strategy@Risk provides a full account of the calculations and results. We can modify the reports to the specific problem at hand, so that the relevant parameters are isolated and explained in the best manner. To further expose the problems at hand, we make extensive use of professional graphic illustrations.

    Here is a selection of our reports – based on the most likely value of the input variables – that is useful to illustrate relevant conditions. In addition probability distributions for all the variables will be calculated and those pertinent to the strategy will be graphed.

    • Profit and loss account and balance
    • Debt and equity calculations
    • Foreign exchange effects
    • Translation and translation hedge effects
    • Production, sales and inventory
    • Gross margin analysis
    • Working capital
    • EBIT, NOPLAT, Free cash flow
    • Cost and value of debt and equity
    • Economic Profit/EVA/Residual income/Super Profit
    • Cash flow to investor and internal proceeds
    • Fri cash flow value
    • Economic profit value
    • Adjusted present value
    • Key figures
    • VAT and investment tax
    • Depreciations
    • Tax deferred and payable
    • Cash flow analysis
    • Financing analysis
    • Year-end dispositions
    • Expected remaining life-time on investments
    • Value drivers
    • Assumptions and parameter values, etc.
  • Who we are

    Who we are

    Strategy@Risk is operated by partners with long experience as CFO, CEO and board members in a range of businesses. As former university employees we can draw on academia when a project demands state of the art knowledge in a field.

    Strategy@Risk takes advantage of a program language developed and used for financial risk simulation. We have used the program language for over 25years, and developed a series of simulation models for industry, banks and financial institutions.

    The language has as one of its strengths, to be able to solve implicit equations in multiple dimensions. For the specific problems we seek to solve, this is a necessity that provides the necessary degrees of freedom to formulate the approach to problems.

    The Strategy@Risk tool has highly advance properties:

    • State of the art in financial- and international trade theory.
    • Double-entry bookkeeping, using accounts balancing as tool for solving simultaneous equations generating P&L and Balance Sheet.

    • Solving implicit systems of equations giving unique WACC calculated for every period ensuring that “Free Cash Flow” always equals “Economic Profit” value.

    • Programs and models in “windows end-user” style.
    • Extended test for consistency in input, calculations and results.
    • Transparent reporting of assumptions and results.

    In the Strategy@Risk framework all items, whether from the profit and loss account or from the balance sheet, will have individual probability distributions. These distributions are generated by the combination of distributions from factors of production that define the item.

    Variance will increase as we move down the items in the profit and loss account. The message is that even if there is a low variance in the input variables (sales, prices, exchange rates, costs etc.) metrics like Noplat, Free Cash Flow, and Economic Profit and ultimately the Value of Equity will have a much higher variance.

  • Projects we have done

    Projects we have done

    Consultancy, in contrast to selling software products, is quite a delicate process. Trust is the most important asset to successfully completing a project, and S@R customers consider discretion to be important. That’s why we have decided to publish relevant contents – which provide insight into our methods of operation – only accessible in anonymous form and often collected from different projects.

    The same applies to naming customers, but large projects has been performed in

    • Finance
    • Banking
    • Pulp & Paper
    • Airport Operations
    • Brewery
    • Aquaculture
    • Mining & Quarrying
    • Car parts
    • Rail coach production

    etc. –  all for multinational companies.

  • Understanding risk, creating value

    Understanding risk, creating value

    We specialize in the positive development of reputations resulting from apposite strategic decision making. We accomplish this through understanding, assessing, managing and financial modelling of corporate risk; ensuring that the best strategic decisions are made. Our approach is holistic and thorough; we focus on quantifying and mitigating downside risk and taking advantage of upside risk opportunities.

    RISK AND OPPORTUNITY ARE EVIDENT IN ALL STRATEGIES

    They embrace and influence almost every organisational strategy e.g. mergers and acquisitions, initial public offerings, investment in new plant, new products, new technologies and new market-places as well as training and skills programmes, labour relations; together with issues relating to purchasing, outsourcing, energy, the physical environment and current / future political dynamics.

    STRATEGIC DECISIONS ARE THE BUILDING BLOCKS OF REPUTATION

    Beyond organisational reputation: the identification and quantification of corporate risk, and strategies for its effective management and mitigation, are becoming required formal statements in corporate announcements in the wake of existing and forthcoming legislation in the US, Europe and elsewhere.
    Working in tune with our clients Strategy@Risk Ltd contributes to the delivery of the right strategic decision(s) i.e. allocating capital and other resources to the highest reward projects adjusted for risk including.

    We develop and implement enterprise-wide risk management programmes establishing ‘best practice’ frameworks dealing with the totality of risks faced by clients.

    Holistically approached and using our expert valuation and unique financial modelling systems we focus upon risk opportunities and rewards and appropriate mitigation strategies together with the effects that uncertainty and changing variables have upon three crucial areas of business:

    • Internal environment – resources, assets, people, skills, culture, systems etc.
    • Market Place – customers, segments, materials, technologies, logistics, substitutes etc.
    • Operating Environment – economic growth, political dynamics, social and demographic changes, regulation and the eco-environment.