Importance The research examines the issues of analyzing financial risks and their effect on primary cost factors and fundamental value. The article describes how financial risks influence reporting indicators. Objectives The research pursues devising analytical instruments to evaluate financial risks and their effect on fundamental value. Methods The methodological framework of the research relies upon objective principles of a systems approach, economic analysis, logic and comprehensive approaches to evaluating economic phenomena and processes. Results I examined the main types of financial risks and outlined an algorithm for evaluating the effect of risks on financial reporting indicators. The article also proposes indicators for assessing financial risks, including the versatile ones (volatility of market indicators, risk concentration, amount of losses) and specific ones for assessing market, credit, and liquidity risks. I investigate how financial risks influence the primary factors of business value: the rate of return on invested capital, sustainable growth rate, weighted average cost of capital. The main risk management methods were analyzed, with reviewing typical approaches of the largest Russian companies to financial risks management. In particular, I scrutinized such methods of control and preventing financial risks as monitoring, planning, diversification, limitation. The article presents approaches to assessing the effect of financial risks on financial reporting figures, indicators of those risks, indicators of their effect on the primary factors of business value. Conclusions and Relevance The article may prove useful for specialists of financial departments who take financial decisions in terms of value-focused management.
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