Read Why do business professionals choose ready-to-use KPIs? to find out the answers to these questions:
Financial risks span any condition that creates a danger for financial standing of a company or individual. The risks can stem from any number of 'internal 'or 'external' sources. Uncertainty in surroundings is one such common problem that is the root cause of all the other 'financial difficulties'.
Commonly recognized types of financial risks are 'Investment risk', 'Business risk', 'credit risk', 'Insurance risk', 'market risk', 'liquidity risk', 'operational risk'. Though the specific characteristics of these kinds differ, a trait associated with each of these is that the 'funds are in serious danger'. Moving on, when it comes to an organizational management, funds are something that cannot be compromised at any level to any degree. Therefore, one is required to carve a useful strategy to keep a constant track of financial operations, rather the inlets and outlets of funds.
Only if application and sources of funds have been wisely selected that it is possible to take the organization ahead and grow it.
To tackle the situation, 'balanced scorecard' is often opted for by financial risk assessors. One can identify the metrics to be put on it and leave the task of monitoring to these.
This is the actual scorecard with Financial Risks Performance Indicators and performance indicators. The performance indicators include: business loans metrics, probability of default, loss given default, limit by industry/sector, limit by credit rating, debt default and allowance metrics, marginal mortality rate (mmr) exposure, delta (price risk), gamma (convexity risk), theta (time decay risk).
How is this book different from 796 other book titles about KPIs on Amazon?
"Before writing a single line, I formulated some guiding principles, one of them was: "If our clients ask, "How can I find a good KPI for..." - I want this book to provide a perfect answer."