Financial Risk Management

Tag: Financial Risk Management

Financial Risk Management is a critical skill for business owners and managers. It is the process of identifying, assessing, and effectively managing financial risks to ensure that any organisation is able to sustain its performance and profitability. Risk Management strategies can help protect businesses from unexpected market downturns or fluctuations, potential losses resulting from changes in customer demand, or from cyberattacks. With financial risk management, businesses can reduce financial loss, improve cash flow, and increase potential for growth. Financial Risk Management offers a holistic approach to financial risk management, helping businesses identify, manage, and adjust strategies in order to meet their goals.

Ratio

Liability to Equity Ratio in Forex Trading: Explained

by Lena K. BradleyAugust 23, 2023

The Liabilities to Equity ratio (also known as Liabilities-to-Equity Ratio or Leverage Ratio) is a comparison of a company’s total liabilities to its shareholders’ funds and is used to measure a company’s financial leverage. This ratio is often used in the foreign exchange market to analyze the solvency of a company and assess its ability to hedge its currency exposures. A high Liabilities to Equity ratio typically indicates higher financial risk, as the company is more leveraged and, thus, has more debt for its assets. Conversely, a lower ratio means that a company has more equity and fewer liabilities, which often translates to a lower level of risk for currency traders.