Possible risks during project implementation. Project implementation risks assessment

“Children at risk” - Reception and registration of those identified by a social worker antenatal clinic. Prevention SOP. Profi-Lactics healthy lifestyle. MUNICIPAL ACCOUNTING. Correction of the “risk group”. Individual correctional program for children and families at risk. Families with children under 3 years old. Head teacher. Council of business partners. Social worker antenatal clinic.

“Environmental Risks” - However, risk appetite can be positive or negative. Risk appetite can be expressed through the utility function u(x). Performance assessment; 14040 -14043 – environmental protection management. EMS elements according to ISO 14001 standard. Group 1. Audit procedures. Given: utility function: u(x)=. Indicators of environmental performance of enterprises (IERDP).

“Teenager in a risk society” - 1. Noise. 2. Teenage alcoholism. Teenager in a risk society. Risks surrounding a teenager: 3. Negative consequences of watching television programs. 4. Early sexual development. 5. Introduction to smoking The period of initiation to smoking coincides with the period of initiation to beer: from the 4th to the 9th grade inclusive.

"Risk Management" - Buffer Time. 30. How can risk management help a successful project? Analysis and prioritization. Documenting the process. What do you associate with the concept of risk? Process 1: Planning. Planning. We got it. What is the importance of each process in risk management? Living with future changes...

“Risk factors for children’s health” - School risk factors. Ecological. Sociocultural risk factors. Social. Organization of medical care. Sociocultural risk factors that influence negative impact on the development and health of the child. Organization of preventive work. Factors influencing health status. Genetic.

“Business risks” - Diversification Increasing the level of information support Limitation. Comprehensive analysis. Inflation risk. Plan Concept of risk. Technical factor. Entrepreneur's risk (borrower's risk). Department of Financial Management. Entrepreneurial risks. Microenvironment. Demographic factor. Neoclassical risk theory.

In a broad sense, project implementation risks are conditions or events that affect the outcome of the project. Such influences can be accompanied by a positive, “zero” or negative effect. In a narrower sense, project risks are defined as potentially adverse impacts that entail losses and damages, since the risk-related nature of uncertainty is considered as an element of unpredictable deterioration of the situation due to internal and external circumstances.

Possible project risks and responses to them depend on the parameters of probability, risk magnitude, significance of consequences, risk tolerance, and the availability of reserves (including management ones) in case of risk situations.

Project risks: dictionary of concepts

Project risks exhibit the effect of accumulating the probabilities of events affecting the project. Moreover, the event itself can bring both benefit and damage, have varying degrees of uncertainty, different causes and consequences (changes in labor costs, financial costs, failures in the action plan).

Uncertainty here is the state of objective factors that have a direct or indirect impact on the project, while the degree of influence does not allow us to accurately predict the consequences of the decisions of project participants due to inaccuracy or inaccessibility complete information. Therefore, it is possible to manage only that group of risks for which there is access to significant information.

Risk probability is the possibility of a threat occurring in the range from 0 to 100 percent. Extreme values ​​are not considered risks, since the zero limit means the impossibility of the event occurring, and 100% guarantee must be provided for in the project as a fact. An event that has a very high degree of probability (for example, a guaranteed price increase by a supplier) is often completely excluded from consideration in the context of the topic of project risks. Probability is determined by two types of methods:

• objective, when the probability of a result obtained under similar conditions is calculated with statistical certainty based on the frequency of the event;
• subjective, based on the assumption of a possible continuation or outcome, and the assumption here is based on the understanding of the logic of the process by the decision-maker and his experience, which the subject represents in numerical terms.

If there is insufficient information about potential costs (for example, after the launch of the project there was an unexpected change in tax legislation), then a special reserve is set aside for such unknown risks, and management procedures are not implemented. The contingency reserve can be either an additional amount or additional time and should be included in the project cost baseline.

If changes can be judged in advance, then a response plan is built aimed at minimizing risks. As a rule, the boundaries of risk management partially cover the information field for which there is no information (complete uncertainty), and partially cover the field with complete certainty, for which there is comprehensive information. Within these boundaries are known and unknown factors that make up general and specific uncertainty.

Since in projects there is a decision maker, the concept of risk can be associated with his activities. Probability here is the magnitude of the possibility that, as a result of making a decision, an undesirable outcome associated with losses will follow.

In addition to internal factors, the project is also affected by external factors

with different uncertainties and different degrees of tolerance to them among project participants and investors. Tolerance here is defined as the degree of readiness for the possible implementation of threats. Often – especially in the case of low probability and low risk – project participants consciously accept the risk, shifting their efforts not to preventing the threat, but to eliminating its consequences. Acceptance refers to one of four basic types of response to a potential threat.

The degree of risk tolerance depends on the volume and reliability of investments, the planned level of profitability, the familiarity of the project to the company, the complexity of the business model and other factors. The more complex the business model, the more thoroughly and in detail the risks should be assessed. At the same time, the typicality of the project for the company is considered a higher priority factor when assessing riskiness than the volume of invested funds. For example, the construction of a retail store included in a retail network can be a high-budget project, but if the implementation uses proven and well-known technologies, then the risks will be lower than when implementing a less expensive but new project. If, for example, the same company reorients or expands its activities and decides to open a catering establishment, it will face a different level of risk, since everything will be unfamiliar to retailers: from the principle of choosing a location and forming a competitive price to the development of a recognizable concept and a new supply chain .

As we move from solving one project problem to solving another problem, the types of risks may change. As a result, it is advisable to carry out risk analysis of an investment project several times during the project, transforming the risk map as necessary. However, at the initial stages (during the formation of the concept and design) this has special meaning, since early detection and preparedness significantly reduces losses.

The sequence of activities for assessing and managing project risks is represented by a management concept that includes the following elements:

1. Risk management planning.
2. Risk identification.
3. Qualitative analysis.
4. Quantitative assessment.
5. Response planning.
6. Tracking and controlling changes to the risk map.

Risk management involves first making project participants aware of the uncertainties in the project environment, then expanding capabilities that increase the likelihood of achieving the planned result, and finally finalizing project plans that include measures to reduce risks.

Stages of risk management

Within the popular project management concept of the PMBoK framework from PMI, there are 6 progressive and interconnected stages of risk management:

Risk management planning

During planning, the strategy for organizing the process is determined, and the rules of interaction are determined. Planning occurs by:

• creating a management environment by popularizing the process for project participants and harmonizing their relationships,
• engaging ready-made templates, standards, schemes, management formats familiar in a given company,
• creating a description of the content of the project.

The main process-tool in this case becomes a meeting, in which members of the project team, managers, executives, and persons responsible for the use of investments (if the risks of the investment project are planned) take part. The result of planning is a document in which, in addition to general provisions, must be entered:

• methods and tools for risk management by stages of implementation,
• distribution of roles for project participants in the event of a risk situation and threat realization,
• acceptable ranges and threshold values ​​of risks,
• principles of recalculation if the risks of investment projects change during the course of the project,
• rules and formats for reporting and documentation,
• monitoring formats.

In general, the output should be an algorithm of actions that everyone can understand in the event of threats arising and realized.

Identification

Risk identification occurs regularly, since threats may undergo qualitative and quantitative changes during the course of the project. Identification is more effective when there is a detailed classification of the risks relevant to a typical project. If a company is working on new, unfamiliar projects, the classification should be as broad as possible so that no risks are missed.

Since there is no comprehensive classification of risks, more convenient formats for a specific project are most often used. Classifications based on the criterion of risk controllability are considered universal and popular; they also describe the level of control, dividing threats into external and internal. External unpredictable and uncontrollable risks, for example, include political risks, natural disasters, sabotage. The external ones are partially controllable and predictable - social, marketing, currency and inflation. Internal controllable risks associated with technology and design, etc. But in general, it is more advisable to create relevant groups for a specific project, especially if it is atypical for the company.

For this purpose, all possible expert opinions are involved, and maximum use is made of wide range information, all known methods are used, from brainstorming and Crawford cards to the analogy method and the use of diagrams. The result should be an exhaustive hierarchical list of risks with their two-part description “source of threat + threatening event”, for example: “risk of failure of financing due to cessation of investment.”

Qualitative and quantitative risk assessment

More labor-intensive, but also more accurate – quantitative analysis. It shows the percentage probability of risks and their consequences occurring in numerical values. Thanks to it, you can trace how the profitability of the project will change with a quantitative change in one or another parameter from the list of critical ones. this project risks. When substituting algorithms into the current project model, thanks to quantitative analysis, it is easy to understand at what values ​​the project will become unprofitable and which risk factors influence this more than others.

Sometimes a qualitative analysis done with the involvement of experts and making an informed value judgment is enough to draw up a map of the probability of risk and the degree of its impact on the project. At the output, after the analytical part, a ranked list should be formed:

• with prioritized risks,
• with positions that require clarification,
• with an assessment of the riskiness of the entire project.

This result can be clearly presented in the form of a risk matrix, which includes not only threats, but also favorable opportunities created by the uncertainty of the situation.

The more complex the project, the more carefully the assessment needs to be carried out, and then without methods quantitative analysis can't get by. Among the most popular methods are:

• probabilistic analysis based on the principles of probability theory and statistical data from previous periods,
• sensitivity analysis based on changes in results due to changes in the values ​​of specified variables,
• scenario analysis with the development of project development options in comparison,
• simulation modeling(“Monte Carlo”), which involves repeated experiments with a project model, etc.

Some of them (for example, the simulation method) require the use of special software, since it is necessary to process a large array of random numbers simulating the “unpredictable” state of the market.

Planning your response

When choosing response methods, we focus on 4 main types of strategy:

• Evasion (avoidance) – elimination of sources of risk.
• Insurance (transfer) – attracting a third party to take on the risks.
• Minimization (reduction) – reducing the likelihood of a threat occurring.
• Acceptance - the passive form implies conscious readiness for a threat, and the active form - agreement on a plan of action in the event of the occurrence of unforeseen but accepted circumstances.

Each method can be used for its own type of risk as optimal.

Monitoring and Control

Control and management activities must be carried out throughout the project. The onset of an unforeseen risk event in the final stages threatens big losses than in the initial stages.

During monitoring, the values ​​of already identified risks are revised and sometimes new ones are identified. In addition, deviations and trends are analyzed, as well as the state of reserves necessary to cover remaining risks.

Identification of economic risks in enterprises: traditional and innovative projects

All risks are grouped by type, but for each project manager or department head system analysis and risk management, there are groups of the most serious threats, formed on the basis of practice and previous experience in the context of activity. For example, production managers most often identify risks associated with:

• with accidents and accidents,
• with property issues that harm the fixed assets of the enterprise,
• with questions of pricing of finished products and prices of raw materials,
• with market transformations (changes in stock indices, exchange rates and cost securities),
• with the actions of fraudsters and theft in production.

The manager of a trading enterprise usually adds to the list of basic ones:

• logistics risks,
• mediation problems,
• risks associated with the actions of unscrupulous suppliers,
• dangers of receivables from wholesalers (primarily when payment is carried out with deferred payment).

On competitive and organized enterprise, which has already repeatedly implemented projects that are typical for itself, a list of characteristic risks and factors provoking them is very quickly formed. The value of such lists is that not only the content side of the issue has been worked out, but also the form: the description of the risk receives a clear, unambiguous formulation, honed by previous projects, which simplifies the consideration and response format. In addition to the lists, it is advisable to create a visual table with coordinates according to the parameters of the probability of risk and possible damage. In such a table it is more convenient to track the dynamics of risk changes.

Traditional projects

Since the risks are similar for traditional projects under certain conditions, they can be standardized and grouped together.

No. 1. Group of risks related to product consumption

Among the reasons that create risks from this group are:

1. The presence of a monopolist consumer in the market, resulting in:
   • unable to influence prices
   • financial costs for maintaining reserves in warehouses increase,
   • unfavorable clauses are introduced in contracts (for example, long deferred payments).
2. Market capacity, which turns out to be less than the total capacity of enterprises in the industry. This, for example, happened in the post-perestroika period, when the construction of panel-type houses sharply decreased, and the demand for reinforced concrete slabs became less than the capabilities of the enterprises producing them.
3. Loss of relevance of products. An example of this risk being realized was the loss of relevance of one electronic media after another (first – floppy disks, then – CDs, etc.).
4. Changes in production technology. This threat is relevant in the B2B market, when, when changing production technology, it is necessary to change the entire pattern of interaction between enterprises that were previously in the production chain.

The risks of this group can be minimized by monitoring the market, changing the sales system and by developing new niches.

No. 2. Group of risks associated with market competition

Risks from the second group are classified as follows:

1. Situations that threaten the financial situation due to a significant share of gray imports on the market, which results in:
   • price dumping by sellers who smuggle goods,
   • a decrease in consumer loyalty, which is provoked by the low quality of counterfeit products, which casts a shadow on all products of this kind.
2. Large secondary market creating:
   • reputational risks as a result of an attempt to pass off a used item as new,
   • the threat of underutilization of production (an example is the secondary market for drill pipes, which takes away a share from an enterprise producing pipes for the primary market).
3. A low barrier to entry into the market, which easily increases competition and affects pricing, adding a reputational threat that products can be easily counterfeited.

Risks from this group can be minimized by trying to lobby for the introduction/cancellation of duties at the legislative level, labeling your products using multiple degrees of protection, changing the market or distribution networks, expanding activities to new niches (for example, introducing service of its products).

No. 3. Group of risks associated with the commodity market

In this group, an enterprise may suffer from the following factors:

1. The presence of a monopolist supplier who is able to inflate prices for raw materials and arbitrarily change the terms of the contract. Among other things, this forces us to maintain a large supply of raw materials in warehouses, which increases the financing of the project.
2. Shortage of raw materials, leading to higher prices and downtime of production facilities.

If there is a raw materials monopolist, risks are minimized by searching for similar raw materials, reorienting to the dealers of the main supplier, and creating a strategic mutually beneficial alliance with the monopolist. If there is a shortage of raw materials, it is effective to minimize risks by creating your own raw material base. In addition, if a shortage occurs due to the departure of raw materials to a market with higher prices, you can repurchase raw materials from the supplier at the same prices, but at the same time, you will probably need to increase the selling price of the finished product.

No. 4. Group of risks associated with organizing and running a business

A number of threats may arise here, but in practice, most often, two are realized:

1. The actual sales pattern of goods differs from the planned one, which is due to:
   • lack of control over dealers and their pricing,
   • insufficient payment discipline,
   • overstocking due to price imbalance,
   • logistic errors.
2. Dividing the business chain between different independent companies. Each of them can find another partner. For example, a manufacturing company working in conjunction with a selling company may lose the opportunity to sell products if the selling company finds a more “interesting” manufacturer (supplier).

Here, the dangers are reduced by creating your own sales units or searching for new partners.

Specific risks of innovation projects

About the high level of risk in innovation activity The following statistics say: out of a hundred venture capital firms, 10-20% avoid bankruptcy. But high risks is accompanied by a high rate of profit for innovative projects, which is usually much higher than the profit for traditional types entrepreneurial activity. This fact stimulates innovation and activates the innovation sphere.

In innovative projects there are dependencies: the more localized the project, the higher the risks. If there are several projects and they are dispersed in the industry, then the likelihood of success of innovative entrepreneurship increases. And the profit from a successful project covers the costs of unsuccessful developments.

In general, risks in innovative entrepreneurship arise from the creation of new goods, services and technologies, which, with an increased probability, will not be able to gain the expected popularity, and management innovations will not bring the expected effect.

Innovation risks may arise in the following situations:

1. When the introduction of a cheaper method of production (or services) loses its technological uniqueness.
2. When a new product is created using old equipment that cannot provide the required level of quality of the product or service.
3. When the relevance of demand decreases (for example, fashion passes).

Based on this, innovative entrepreneurship is characterized by the following threats:

• wrong choice of project,
• failure to provide the project with sufficient funding,
• failure to fulfill business contracts due to the specific complexity of the innovation,
• unforeseen costs for improving the “raw” product,
• personnel problems associated with the lack of competence to implement innovation,
• loss of uniqueness and status of “special technology”,
• violation of property rights,
• the whole range of marketing risks.

The legislation of the Russian Federation provides for the concept of entrepreneurial risk, which makes it possible to apply risk reduction methods to innovative entrepreneurial projects: insure risks, prudently reserve funds, and diversify the project.

• Risk insurance. If the participant himself cannot guarantee the implementation of the project, then he transfers certain risks to the insurance company. Abroad, full insurance is used when it comes to investment projects. Russian insurance practice allows for now to insure individual components of the project (equipment, personnel, real estate, etc.).
• Reserving funds. Here the relationship is established between potential risks that affect the cost of the project and the amount of funds required to overcome violations. The reserve value must be equal to or greater than the fluctuation value. In Russian practice, for example, the cost of the duration of work by Russian contractors involves adding 20% ​​of costs.
• Diversification. Distribution of risks between project participants.

Minimizing risks inevitably increases project costs, but at the same time increases project profit.

When working on a project, as stated in the Methodological Recommendations, the following most important types of risks should be identified:

associated with the instability of economic legislation and the current economic situation, investment conditions and use of profits;

foreign economic (the possibility of introducing restrictions on trade and supplies, closing borders, etc.);

unfavorable socio-political changes in the country and region caused by the uncertainty of the political situation;

incompleteness or inaccuracy of information on the dynamics of technical and economic indicators, parameters new technology and technology;

associated with fluctuations in market conditions, prices, exchange rates, etc.;

caused by uncertainty of natural and climatic conditions, the possibility of natural disasters;

production and technological (accidents and equipment failures, manufacturing defects, etc.);

associated with uncertainty of goals, interests and behavior of participants;

caused by incomplete or inaccurate information about the financial position and business reputation of participating enterprises (the possibility of non-payments, bankruptcies, failures of contractual obligations).

Table General classification of project risks

Each such mixed classification may contain its own set of risks depending on the chosen angle of view on project activity, the available material on already implemented projects and the experience of specialists trying to develop a matrix of “typical” risks of project activity. Some types of projects may have their own characteristics. specific risks, related to their regional and sectoral characteristics.

There are risks:

dynamic- the risk of unforeseen changes in project cost estimates due to changes in initial management decisions, as well as changes in market or political circumstances. Such changes can lead to both losses and additional income.

static- the risk of loss of real assets due to damage to property or unsatisfactory organization. This risk can only lead to losses.

One of the most significant management risks is the risk of loss of project control., the main reason for which is the difference in the final goals of the investor and the management of the company implementing the project. Other reasons include: improper organization of project work; revaluation of the project participants’ own contribution; a rather widespread disdainful attitude towards the agreements reached in Russia; errors in financial management and their use for other purposes; Developers are focused on the process of work rather than on achieving results.

Under equal possible conditions for project implementation, it is recommended to take into account the following types of risks.

Industrial - the risk of non-fulfillment of the planned volumes of work and/or increased costs, shortcomings in production planning and, as a consequence, an increase in the operating costs of the enterprise.

Types of production risks:

Geological (the risk of incorrect determination of mineral reserves based on the amount of useful substance in the ore, the presence of particularly harmful impurities, and the conditions of occurrence and passage);

Environmental (the risk of violation of environmental standards, increased production costs due to increased environmental protection costs, suspension or even complete closure of the facility for environmental reasons);

Managerial (due to the insufficient level of qualifications and experience of management personnel).

Investment and financial - the risk of possible depreciation of the investment and financial portfolio, consisting of both own securities and purchased ones.

Sales - the risk of a decrease in sales volumes of the project product (goods, services) and prices for this product. Sales risk is also called the risk of changes in market conditions, marketing or price.

Political - the risk of incurring losses or reducing profits due to changes in government policy.

Financial - risk associated with transactions with financial assets. Happens:

Interest - the possibility of an unplanned change in the interest rate when concluding long-term loan agreements based on a floating interest rate;

Credit - associated with the bank’s inability to fulfill loan agreement due to financial collapse;

Foreign exchange - the risk of potential losses due to changes in exchange rates.

Economic - the risk of losing the competitive position of an enterprise due to unforeseen changes in the economic environment of the company, for example, rising energy prices, interest rates for loans for financing working capital, increases in customs tariffs and other similar factors.

Riskproject participants - the risk of conscious or forced failure by a participant to fulfill its obligations within the framework of project activities.

Riskexceeding the estimated cost project. Reasons for exceeding the estimated cost of a project may include design errors, the contractor's inability to ensure efficient use of resources, or changes in project implementation conditions (for example, price increases, tax increases).

Riskuntimely completion of construction. The reasons may be design errors, violation of obligations by the contractor, changes external conditions(for example, public demand to close the project for environmental reasons, additional administrative regulations from the authorities, bureaucratic delays, etc.).

Risklow quality work and the facility may be due to a violation of the obligations of the contractor (and/or supplier of materials and equipment), design errors, etc.

Structural - the risk of technical impracticability of the project even at the investment (construction) phase. It is caused by possible miscalculations and errors of the developers of design (technical) documentation, insufficiency or inaccuracy of the initial information necessary for the development of this documentation, and the untested nature of construction technologies.

Technological - the risk of deviation in the operating mode of the facility from the specified technical and economic parameters as a result of the use of production technologies that have not been tested on an industrial scale (the risk of increased operating costs, a high percentage of defects, a high accident rate, non-compliance with environmental standards, etc.)

Riskrefinancing . Arises in connection with the issuance by the leading bank (financing organizer) of an obligation to provide the borrower with a syndicated loan for a certain amount and difficulties arising during the subsequent loan syndication. This risk falls entirely on the leading bank.

Administrative - belongs to the category of external (exogenous). Associated with obtaining various licenses, permits and approvals from government regulatory and supervisory agencies by the project company and other participants in project activities.

Country risks. Includes political and economic risks. However, they may not necessarily be related to the actions of the host country authorities. Some processes that negatively affect the project are spontaneous in nature and are poorly amenable to government regulation (at least in the short term). We are talking about both socio-political processes (wars, social unrest, surges in crime, etc.) and economic ones (inflation, emigration of qualified personnel, falling demand for the project product in the domestic market, general collapse of the economy, etc.).

Legal - V to some extent overlap with country, administrative, and managerial ones. First of all, they are expressed in the uncertainty and lack of confidence of the lender in the ability to implement guarantees and other security for the loan.

Force majeure project risk - the risk of force majeure, the risk of natural disasters, is classified as external to the project activity and includes the risk of such natural phenomena as earthquakes, fires, floods, hurricanes, tsunamis, etc. Some social and political events also fall under the category of force majeure natural phenomena: strikes, uprisings and revolutions, etc. Thus, some country risks can simultaneously be force majeure.

Self-Study Questions (SST)

Dynamic and static risk.

Using risk classification in risk analysis.

Security questions

1. Formulate the principles of risk classification.

2. Give a general classification of risks according to classification criteria.

3. Determine what is special about the classification of risks of investment projects.

4. Expand the concepts of “dynamic” and “static” risk.

5.Explain how risk classification is used in risk analysis.

List of educational, methodological and additional literature

Basic literature:

Afanasyev A.M. Risk management of an investment project - UNITY, 2009.

Further reading

Gracheva M.V. Risk management of an investment project: a textbook for students of higher educational institutions studying economics / [M. V. Gracheva and others] ed. M. V. Grachevoy, A. B. Sekerina Risk management of an investment project: Moscow, UNITI, 2009.

Agarkov S. A. Risk management (risk management): textbook. - St. Petersburg, Info-M, 2009.

Literature from the electronic catalog:

1. Zhivetin V.B. Risks and safety of aviation systems - Publishing House of the Institute of Risk Problems, 2006.

2. Glushchenko V.V. Risks of innovation and investment activity in the context of globalization - SPC Wings, 2006.

3. Melnikova G.V. Reducing project and contract risks in the commercial preparation of licensing agreements - Ecostar, 2005.

4. Socio-economic risks: diagnosis of causes and forecast neutralization scenarios - Institute of Economics, Ural Branch of the Russian Academy of Sciences, 2010.

Lecture No. 3 “Project risk management process”

DE 1.4. Analysis and assessment of the degree of project risk

Risk management is a decision-making process, and the following five stages of decision-making can be distinguished:

1) recognition and verbal description of the decision-making situation;

2) formalized formulation of the problem, formulation of the criterion (criteria) for choosing a solution;

3) development of solution options; forecasting the results of making and implementing the chosen decision;

4) assessment and ordering of solution options;

5) choice of solution to be implemented.

At the first two stages, a criterion is formulated by which the preference of a particular solution is assessed.

Accounting task risk factors arises at the 3rd and 4th stages, where it is necessary for each of the possible options to identify risk factors, take into account their influence, describe possible states of the environment and evaluate the possible consequences of decisions depending on these states.

Decision options under risk conditions are characterized by a range of possible consequences, with some consequences being more favorable than others. The decision maker is interested in ensuring that, as a result of the implementation of the decision, the ideal, from his point of view, the most favorable of all possible consequences occurs. Therefore, in the course of making a decision and implementing the decision, the decision maker can provide events, by directing them to promote risk factors that lead to favorable consequences and counteract factors that have a negative impact.

In relation to To economic systems these activities are associated with certain resource costs, which should also be provided for during the decision-making process.

Thus,

risk management refers to the development and implementation of measures aimed at both countering the negative impact of risk factors and using their positive impact on the final result.

The process of managing the economic system in combination with risk management is shown schematically in Fig. 1.3.

Rice. 1.3. System management scheme taking into account risk management

On this diagram general management means system management based on existing control technology without taking into account risk factors. Risk factors affect the environment, the state of which affects the consequences of the decision made, i.e. on the final result of management influence on the system. Risk management measures can be aimed both at the system itself - in the form of additional control actions - and at the environment.

When influencing the system, a goal can be set do this system stable in relation to certain changes in the state of the external environment. Activities aimed at changing the external environment may aim to counteract certain negative risk factors or compensate for their impact on the environment.

An example of impact on the environment in order to compensate for the negative manifestation of risk factors is insurance of the enterprise's property against fire, natural disasters, etc. In this case, no changes occur at the enterprise itself, but if risk factors manifest themselves negatively (the occurrence of an insured event), this manifestation is compensated by insurance payments. Risk management costs are payments made by an enterprise when concluding an insurance contract.

An example of risk management as additional control actions The system can be influenced by the creation of a significant supply of raw materials and components at an industrial enterprise. In this case, during the production cycle, the enterprise acquires resistance to such risk factors as irregular supply of raw materials by supplier enterprises, the possibility of interruptions in transport, etc.

Thus, risk factors as such are not eliminated, but their influence on the final result of the production cycle is limited. The costs in this case will be the costs of warehousing and storing inventory. In addition, the price of some components needed at the end of the production cycle, but purchased in advance, may decrease during the time period under consideration. In this case, the price difference should also be understood as the cost of risk management.

Another example is the acquisition by large (mainly foreign) enterprises of patents in the field of such technologies, the use of which is possible only in the very distant future. At the same time, enterprise management is aware that many of the acquired patented developments may not be in demand at all, but if they are in demand, the enterprise will have a significant advantage over competitors. In this example, the enterprise's actions are aimed at taking advantage of the possibility of positive manifestations of uncertainty factors.

Let's consider main stages of decision-making under risk conditions.

According to this scheme, risk analysis and direct risk management are carried out in several stages.

Stage 1. Statement of the problem of making a management decision. Determining the target state of the control object.

Stage 2. Consideration of options for management influences (decisions), as a result of which the management object can be brought to the target state.

Stage 3. Identification of the composition of risk factors that can have a significant impact on the final states of the control object in conjunction with control actions.

Stage 4. Description of environmental conditions that can be formed as a result of the manifestation of risk factors.

Stage 5. For each of the decision options under consideration - a description of the consequences of the decisions, i.e. final states of the control object, formed by control actions and environmental states.

Step 6: Consideration of possible risk management measures, e.g. impacts on the control object or the environment. The purpose of these activities is to counteract the negative impact of risk factors and promote their positive manifestation.

Stage 7. Assessment of solution options taking into account risk management measures, their ordering by preference from the standpoint of achieving the set goals. The final choice of solution based on this ordering.

Rice. 1.4. General statement of the risk management problem

Let us consider the groups of main tasks solved by risk managers when managing an economic system under risk conditions.

1. Identification of the main risk factors during the adoption and implementation of management decisions, as well as a description of the consequences of their manifestation. Identification of risk factors is an important task, and according to some experts (possibly controversial), identifying and qualitatively characterizing an unaccounted risk factor is much more important than measuring the level of risk based on certain indicators. That's why It is highly desirable for a risk manager to have an idea of "standard» the composition of risk factors related to the type of activity under consideration.

2. Development and (or) optimal selection of methods for quantitative assessment of the consequences of risk factors. Here, the risk manager is required to possess the necessary mathematical tools, including both methods of quantitative analysis of uncertainty and forecasting methods. Quantitative assessment of the consequences of risk factors is not an end in itself, but an economic necessity. The specificity of the manifestation of some risk factors may be, for example, such that the costs of risk management may exceed the size of the losses prevented, and therefore taking measures aimed at counteracting these factors obviously does not make sense.

3. Identification of the main methods of countering the negative manifestations of risk factors and, if possible, methods of using their positive manifestations. Solving these problems requires not only knowledge of the subject area and general risk management methods (insurance, diversification, hedging, etc.), but also legal knowledge, since a number of risk management methods are based on taking into account possible negative consequences (for example, force majeure circumstances) drawing up and concluding agreements between counterparties.

4. Optimization of risk management costs. This consists in a new assessment of the consequences of the manifestation of risk factors, already taking into account possible risk management measures, assessing the costs of risk management and choosing the optimal composition of measures - the maximum amount of losses prevented (or additional benefits obtained) for given (or possibly minimal) risk management costs . Based on modern requirements for taking into account risk factors in the management of economic systems, many authors believe that their analysis will be more perfect the more various risk management measures are recommended. It is necessary to calculate how expensive and effectivetheseactivities from the perspective of preventable losses or additional benefits.

Risk minimization concepts andacceptablerisk

Among the methods on the basis of which risk management is carried out, three can be conceptually distinguished:

Risk minimization concepts;

Acceptable risk;

Risk as a resource.

Risk minimization concept. The first group consists of methods based on the traditional approach to risk as a purely negative component of economic activity. These methods are aimed at reducing the level of risk to the minimum possible value . Conventionally, we can say that these methods are based on the concept of risk minimization. In all these methods, risk management activities are identified with a reduction in its level and it is assumed that they are more effective, the lower the level of risk achieved as a result. Within these methods, corresponding risk level indicators are selected, for example, the probability of a negative outcome (the probability of an undesirable event).

However, it is known that risk minimization is not universal effective approach to making rational decisions under risk conditions, even without taking into account the costs of risk reduction: simply choosing the least risky decisions often leads to low returns.

The most illustrative examples in this regard are provided by the securities market. As a rule, high-yield stocks are also characterized by a high level of risk. Low-risk and highly liquid securities, as a rule, do not provide high returns. This circumstance was once called the risk-return paradox. . The paradox is that the level of risk should not be increased, since with the level of risk the possibility of losses increases, on the other hand, when the level of risk decreases, the chances of receiving high profits decrease.

If risk reduction is achieved not by simply choosing the least risky solution, but by taking special measures, then the ineffectiveness of risk minimization becomes even more obvious, since the costs of minimizing the level of risk may exceed the amount of losses prevented.

However, there are many situations where the level of risk must certainly be reduced to the lowest possible level. First of all, these are the risks of various catastrophic events. For example, the risk of an accident at a nuclear power plant must be minimized, regardless of costs.

On the other hand, just as there are practically no random events whose probability is zero, the level of risk is almost impossible to reduce to zero: even as a result of the most expensive measures, the probability of a nuclear reactor accident remains positive. We can only say that this probability will be below the significance level, i.e. will be so small that the accident can be considered an almost impossible event.

Thus, minimizing the level of risk can and should be considered as a goal in many situations, but this goal is practically unattainable, i.e. in fact, the level of risk can be reduced not to zero, but to some value so small that it can be considered acceptable.

The concept of acceptable risk. This concept was once developed in connection with the ineffectiveness of risk minimization as a universal management method, including to resolve the “return-risk” contradiction. The term "acceptable risk" in scientific literature has been used for quite a long time, The basis of the concept is the following provisions.

1. Economic risk is an objective property of the purposeful activity of an economic entity.

2. Economic risk is caused by objective reasons: incomplete information about the past and present, as well as the uncertainty of the future.

3. The economic risk of a manufacturing enterprise operating in the market for resources, goods and services is always present to one degree or another, i.e. the level of economic risk is never zero.

4. Economic risk arises where a decision is made to choose one of the options.

5. Economic risk is manifested in the possibility of undesirable developments and deviations from the pursued economic activity of the enterprise.

6. Undesirable developments and undesirable deviations from the pursued economic goal are associated with losses (damage) for the business entity.

7. The level of economic risk is a subjective characteristic; it reflects the amount of damage to the enterprise (according to its assessment) caused by undesirable developments caused by the action (manifestation) of risk factors when making a given business decision.

8. The level of economic risk can be influenced and its value reduced, i.e. The level of economic risk can be controlled within certain limits.

9. It is necessary to distinguish between the starting and final levels of risk, i.e. that final level of risk that, according to calculations, will remain uncompensated after the development and adoption of special measures to reduce it.

10. There is a level of risk that the decision maker can name as acceptable for a given production enterprise in a given economic situation.

11. It is possible to reduce the level of economic risk to an acceptable value by spending some resources (material, financial, etc.) on anti-risk measures.

12. If the starting level of risk of a certain business option is negligible, this may mean that this solution option does not contain novelty or significant advantages (benefits).

13. A greater level of risk is usually associated with hope for greater success, but also with the danger of large losses (damage).

14. The level of economic risk of an original, untested business idea is, as a rule, higher than for standard, standard, routine solutions. By conscious, rational actions (risk management), this level can sometimes be reduced to an acceptable value.

15. The level of economic risk can be measured in different ways, for example, by assessing the material consequences of an undesirable development of events (UNS) resulting from the manifestation of a certain economic risk factor, and the degree of reality of a particular option (direction) of events.

Despite the fact that during the development of this concept, the object of application was the risk management process of a manufacturing enterprise, it can be applied to the management of any economic system, i.e. the concept of acceptable risk can be spoken of as one of the general concepts of risk management.

The concept of acceptable risk reflects the general principles of the theory of economic risk: risk is associated with the presence of alternatives in the choice of actions, the presence of risk is objectively determined by the uncertainty of the consequences of the actions taken.

At the same time, the concept of acceptable risk contains a number of the following significant points that distinguish it from the general theory:

Risk management should be carried out on the basis of separating the starting and final risk;

The level of risk should be reduced not to a minimum, but to an acceptable level;

The risk level of innovative activities is usually higher than that of traditional activities.

Thus, the concept of acceptable risk also aims to reduce risk, but at the same time a rational approach is taken, i.e. the costs of anti-risk measures are compared with the size of possible losses and the extent of the possibility of consequences.

The main disadvantage of the concept of acceptable risk is that it does not allow full use of the possibilities of positive risk realization, although this possibility is taken into account to a certain extent within the framework of the concept (provisions 12-13).

However, when calculating the level of risk within the framework of this concept, it is not supposed to take into account the size of the benefit and the reality of this benefit in the event of a positive realization of the risk. This follows from the above provisions, according to which the calculation of the level of risk is associated only with losses. Within the framework of the concept, we do not receive an answer to the question of what qualitative property of risk provides the opportunity to receive additional income as a result of making risky decisions.

Thus, in terms of analyzing possible additional benefits associated with making risky decisions, the concept of acceptable risk needs to be further developed.

One of the possible ways of such development is concept of risk as a resource.

The most effective risk management in this case is to use the impact on the control object of the largest possible number of positive risk factors and reduce the impact of the largest possible number negative factors.

Taking into account the principle of separating the starting and final levels of risk The use of resource-like manifestation of risk is as follows. A solution option with an increased starting level of risk is selected, but at the same time high level risk must be due, among other things, to the significant manifestation of positive factors. Reducing the starting level to the final value should be achieved mainly by suppressing the impact of negative factors. In this case, the increased starting level of risk will be justified. The fact that most risky decisions not only do not lead to high incomes, but are also accompanied by significant losses, is explained by the fact that in such decisions the high level of risk is caused mainly by the manifestation of negative factors.

The concept of risk as a resource is the optimal principle for managing resource-like risks.

The main features of resource-like risk are identified.

First and its main feature is that increasing its level can lead to additional benefits, i.e. This risk is characterized by the presence of a composition of positive factors.

Second- this is the fact that, as a rule, one can avoid taking a resource-like risk (unlike catastrophic and attributable-negative risks): one can not participate in the lottery, not purchase high-risk securities, the bank may not expand the number of borrowers by reducing requirements for loan collateral, etc. Third- increasing its level is effective up to a certain limit, i.e. we're talking about about the existence of some optimal level. A decision corresponding to the optimal level of risk is characterized by the fact that its results are already influenced by all possible positive risk factors. A further increase in the level of risk will mean the involvement of additional factors in the process, the manifestation of which is exclusively negative, which is ineffective. Therefore, managing resource-like risk should consist of maintaining it optimal level, which, in particular, implies the possibility of consciously increasing this level. On the other hand, if the level of this risk is higher than optimal, it must be reduced.

Resource-like risk has the following characteristics:

Increasing the level of risk leads to a positive effect;

As a rule, it is possible to refuse to accept a given risk;

Increasing the risk level has a positive effect up to a certain limit, after which a further increase in this level only leads to negative consequences;

Managing resource-like risk involves maintaining it at a certain optimal level.

In the field of financial management, resource-like manifestations of risk are associated with the concept speculative risk, which is a risk, as a result of which, along with negative and zero ones, it is possible to obtain positive results (unexpected profits).

For most investment projects associated with real investments, the risk of the project as a whole is characterized by a fairly wide range of positive factors. This especially applies to projects that have a significant innovative component, i.e. associated with the use of new production technologies or the production of new types of products, a new system for organizing production and sales, etc. Such projects are characterized by an increased level of risk compared to investment decisions, the purpose of which is to simply compensate for the disposal of fixed production assets. During the implementation of such projects, the investor’s conscious acceptance of an increased level of risk occurs simultaneously with the decision to implement the project, i.e. positive risk factors are part of the factors that form the starting level of risk of an investment project. From the perspective of the concept of risk as a resource, the main content of risk management of an investment project is to carry out measures aimed at suppressing the impact of negative risk factors. However, for many investment projects there are a number of components (separate subtypes) of the total project risk that can be considered resource-like. First of all, this includes innovation and marketing risk.

In fact, it is generally impossible to talk about the advantages of one concept over another. In a risk situation, where losses - the possible consequences of the decision made - in the event of a negative risk realization are so great that they are not comparable with the costs of anti-risk measures, risk management methods based on the concept of risk minimization will be the most effective. For example, the risk of fire in the warehouse of finished products of a manufacturing enterprise should be minimized by taking all measures that, in principle, can reduce it: compliance with fire safety measures when storing products (checking the serviceability of electrical wiring, instructing personnel, etc.), providing the warehouse with fire-fighting equipment ( security and fire alarms, access to fire hydrants, etc.). If the company has the opportunity to insure its products in case of fire, this must also be done, since losses in the event of a fire are not comparable to the costs of preventive measures.

Thus, minimizing risk is the optimal management principlecatastrophic risks, i.e. such risks that are realized negatively, and losses as a result of a negative outcome many times exceed the costs of possible measures to prevent these losses.

The concept of acceptable risk is optimal in relation toattributively negative risks, i.e. such, the manifestation of factors which leads only to negative, but not catastrophic consequences.

The mentioned concept of risk as a resource has a limited scope. The object of its application is the so-called resource-like risks. The main characteristic of resource-like risk is the possibility of obtaining additional benefits (or reducing costs) as a result of increasing its level.

Basic definitions

A business plan is a document that describes the company’s development strategy, its internal resources, external market environment. The task of a business plan is to provide an economic justification for the company’s activities, to correctly predict its cash flows, profits, profitability and a number of other indicators. A business plan describes the stages of development of a company, analyzes its competitors and development prospects.

The table briefly describes the main sections of the business plan and their content. Depending on the specific industry and business goals, the business plan may contain other sections.

Business plan section	Section Contents
The company and its business model	Analysis of the relevance and prospects of the business model, general description companies
Product	Detailed description the company's product and its advantages
Market	Analysis of the volume and dynamics of market development, consumer demand, industry development prospects
Competitors	Analysis of competitors and their development strategies
Finance	Organizational cash flows, revenue, profit, profitability, EBITDA and other economic indicators
Production	Analysis of production resources and processes of the organization
Marketing	Company marketing strategy, advertising and promotion
Organizational structure and personnel	Description of the company structure, brief summary of management and key employees
Risks	Assessment and prevention of negative situations arising in the course of the company’s activities

Business risk is the risk that the firm will not achieve planned results. Thus, the invested funds, resources, time and effort will be lost. Risk is also understood as the danger of economic damage occurring in the process of doing business. Business risk analysis is a necessary element of a business plan; without it, the document loses its meaning. It is the identification and prevention of risks that give a business plan weight in the eyes of entrepreneurs and investors.

Classification of business risks

A general description of business risks is presented in the table.

Risk type	Brief description
Uncontrollable risks	Economic, political and social situation Social upheaval, economic crisis, nationalization of assets. Natural disasters Earthquakes, hurricanes, tsunamis, etc. Currency risks Fluctuations in exchange rates, changes in the principles of currency regulation. Changes in taxation Increase in tax burden. Changes in legislation Legislative initiatives that negatively affect the business environment.
	1. Production. Technological risks, risk of defects, disruption of production chains. 2. Financial. Lack of working capital, accounts receivable, rising costs of the company's products. 3. Personnel. Inconsistency between the qualifications of employees and the work performed, dismissal of key employees, sabotage, labor legislation. 4. Market. Changes in the industry market that are negative for the company: new technologies, trading principles, etc. 5. Operating rooms. Violations in the implementation of business processes and operations, in particular accounting.

Uncontrollable risks cannot be managed by the company itself, while the enterprise can influence controlled risks. The business plan must include the prevention of all types of business risks.

Risk prevention in a business plan

The section on risks usually comes after a description of the company's production, financial, personnel and marketing strategies. The purpose of this section is to summarize critical analysis business plan, revision of a number of points in terms of description and prevention of risks, issuance of specific recommendations for the prevention and minimization of business risks.

Depending on the type of business risk, the following prevention methods are used in the business plan.

Uncontrollable risks

Although the firm cannot influence the occurrence of these risks, the business plan must include ways to minimize their consequences. There are financial and organizational methods for preventing uncontrollable risks.

Financial include:

• property insurance;
• creation of cash reserves;
• related investment.

Organizational measures include:

• development of IT infrastructure and creation of backup copies of all critical data, so that in case natural disaster do not lose commercial information;
• expansion of the company's geographic presence and diversification of sales regions;
• material and technical prevention of the consequences of natural disasters.

Also included in the prevention of uncontrollable risks is increasing the liquidity of products and their value in the eyes of the consumer, which allows maintaining demand even in the face of changes in the macroeconomic environment.

The impact of this type of risk can either be eliminated altogether or reduced to an insignificant level. In many ways, it is the competent management of controlled risks that becomes competitive advantage a number of companies. Let's consider ways to prevent and eliminate these risks.

1. Control over material and technical equipment, competent management of depreciation and replacement of obsolete equipment.
2. Control over key points of the technological process, optimization of production chains.
3. Product quality control at all stages of production.

1. Control over the financial stability of the company, management of the share of borrowed funds in the total amount of financing.
2. Diversification of funding sources.
3. Competent management of accounts receivable.
4. Analysis and forecasting cash flows companies.
5. Engagement of a financial auditor.

1. Building a correct HR policy for the company aimed at attracting, retaining and developing the best specialists.
2. Monitoring and compliance with labor laws.
3. Timely familiarization of personnel with safety precautions and features of the technological process.
4. Organization of training and advanced training of personnel.
5. Personnel rotation.

1. Short-term and long-term analysis of the market, industry and competitors.
2. Prompt response to the emergence of new technologies, changes in consumer preferences and the entry of new players into the market.
3. Monitoring legislation and government regulation.
4. Diversification of the company by industry and geography.
5. Expansion of the range.

Operational risks

When analyzing a specific business plan, you should step by step go through all the known risks and apply them to the business case under consideration. It is necessary to analyze the impact of each risk on the company’s activities, rank the risks by level of danger and describe in the business plan measures to eliminate or minimize the impact of each risk.

It is important to understand that a business plan is not a static, but a dynamic document. Risk analysis is not a one-time event, because the market environment is constantly changing. Risks must be analyzed and mitigated at every stage of the company’s activities.

The results of investment activity largely depend on how fully and objectively risks are taken into account at the pre-investment stage, even before a decision is made. To understand whether the gamble is worth the candle, you can include a risk adjustment in the discount rate, if we are talking about small projects, or carry out comprehensive study risks if the project is large.

In this article you will learn:

Most investment projects are construction projects, which are characterized by both general investment risks and specific ones. Among all the risks inherent in investment and construction projects, one can highlight a decrease in profits, the value of assets, and the occurrence of additional costs. Accordingly, the objectives of risk analysis are to obtain reliable criteria for the effectiveness of an investment project and to increase the validity of the investment decision 1 .

Cumulative method

One of the most simple ways take into account project risks - reflect their level in the discount rate, which is used in calculating the project’s economic efficiency indicators (NPV, IRR, PI, PP). For these purposes, in the author’s opinion, the most suitable is the cumulative calculation method (build-up approach), which makes it possible to identify various factors risk by expert means:
r = r c + r f ,
where r – discount rate, %;
r c – risk-free rate of return, %;
r a – adjustment (premium) for risks, %.

As a risk-free rate, you can use the average annual return on securities corresponding to the investment project in terms of terms and currency. For example, if the intended investment currency is dollars, then the rate of return of US Treasury bonds, the maturity of which approximately corresponds to the term of the investment, is taken into account.

When it comes to risk adjustment, different approaches can be taken. For example, rely on the Methodological recommendations for assessing the effectiveness of investment projects (approved by the Ministry of Economy, the Ministry of Finance, the State Construction Committee of Russia on June 21, 1999 No. VK 477). However, a more accurate method would be to identify individual risk factors that affect the implementation of a given project. They can be combined into groups: macroeconomic, political, social, regional and industry risks, as well as construction conditions (that is, the implementation of a specific project).

Table 1. Range of risk adjustments based on the object’s uniqueness factor

Personal experience
Sergey Glushkov

It should be remembered that the costs of risk identification work and subsequent activities should not exceed the resulting effect. In practice, the number of identified project risks can reach 150 for complex objects, but on average no more than 30–40 are considered.

The risk description does not provide information about possible losses or their likelihood; it serves as the basis for a quantitative risk analysis.

Table 3. Project risks of an investment and construction project (extraction)

Pre-investment stage		Investment (construction) stage			Operation stage
Research	Preparation for construction <1>	Procurement organization <2>	Construction and installation works (CEM)	Completion
Errors in determining the location of an object	Delay in development of design documentation	Delay in selecting applicants	Construction schedule shift	The emergence of civil liability (ecology, etc.)	Errors in determining the selling price
Errors in determining interest payments for a loan	Errors when preparing permits for the project	Additional costs for tenders	Increase in the cost of construction and installation work as a result of shifts in deadlines	Disruption of commissioning work	Occurrence of a warranty case
Errors in physical output sq. m according to the project	Delay at the stage of coordination and approval of design documentation		Low quality work	Delay in commissioning of the facility	Delay in commissioning dates
Transfer of proceeds abroad			Late delivery of materials	Late demobilization of resources
Delay in the timing of examinations	Delay in obtaining a building permit		Late delivery of equipment	Equipment defects

<1>The stage includes the development of design estimates (DED) and work planning. – Approx. ed.
<2>The stage includes holding tenders and concluding supply contracts. – Approx. ed.

Table 4. NPV sensitivity analysis

Risk factor
	–20%	–10%	0%	+10%	+20%
Change in the cost of construction and installation works (CEM)	2369	2070	1704	1363	1150
	1159	1406	1704	1968	2232
Shift in implementation deadlines	3493	2982	1704	878	273
Delay in development of design and estimate documentation	1772	1740	1704	1689	1644
Untimely withdrawal land plot	1744	1705	1704	1686	1668

Table 5. Risk factor probability scale

Quantitative risk analysis

The task of quantitative analysis is to identify the most significant risks in terms of their impact on net present value NPV project and determine the likelihood of their occurrence. Based on its results, one can draw a conclusion about whether it is worth implementing the project given the detected level of risk and the corresponding amount of potential losses.

Personal experience
Sergey Glushkov, Head of the Investment Projects Department of the Ecological Products company (Moscow)

Risks must be assessed on at least two scales: materiality and probability. Those whose consequences will be negligible can be neglected, even if the probability of their implementation is high. At the same time, you should focus on managing the most significant risks - take countermeasures in a timely manner, prevent the occurrence of risk events, avoid them, and insure them. It should be noted that only a relatively small number of risks are significant. For example, for construction projects these are most often deviations in terms of timing and costs.

Sensitivity analysis. The most significant risks that have a significant impact on the NPV size are identified through sensitivity analysis. It can be carried out for all identified risks, but it is too labor-intensive. For this reason, aggregated risk factors are identified, which, according to experts, are the most important, those that are often encountered in practice or that contribute to the emergence of other risks. For example, for almost any investment and construction project, the enlarged risk factors are changes in the cost of construction and installation work, a shift in the timing of the project, and a change in the selling price of 1 sq. m. m of facility area, delay in the development of design estimates and untimely allocation of land. The value of each risk factor and its impact on the income and expenses of the project are determined on the basis of expert opinion, then the planned NPV value is recalculated.

Note that the calculation of NPV sensitivity begins with choosing the range of possible changes in the risk factor values. It is assumed that each of the risk factors has five possible scenarios implementations: decrease by 20%, by 10%, increase by 20%, by 10% and an intermediate scenario that does not involve changes (0%). The NPV values ​​obtained for each scenario are reflected in the table (Table 4). Thus, with a decrease in the cost of construction and installation work by 20%, NPV increases from $1,704 thousand to $2,369 thousand, and with an increase in the cost of construction and installation work by 1%, it decreases to $1,363 thousand.

From the identified risk factors, you need to select those that have the most significant influence by the NPV value. As can be seen from table. 4, NPV is most significantly affected by a shift in sales deadlines, a change in the sales price of 1 sq. m of facility area and fluctuations in the cost of construction and installation work. Further analysis is carried out on them. The number of significant factors depends on what threshold for reducing the NPV of the project is acceptable for the investor company. If, for example, it is 5%, then all risk factors that have a greater impact on NPV can be classified as significant.

Probability of risks occurring. To avoid disagreements between experts when determining the likelihood of risk events occurring, it is advisable to use an auxiliary (explanatory) scale (Table 5).

The probability of material risk factors occurring is determined in two stages. First, the probability that the factor will change in principle is calculated (the so-called first-level probability). For example, according to expert estimates, the probability of meeting deadlines is 40% (that is, deadlines will be violated with a 60% probability).

At the second stage, the probability that the risk factor will change by a certain amount is determined (second level probability). It is assumed that, just as in the sensitivity analysis, each of the risk factors has five possible implementation scenarios. The final probability for each risk factor is obtained by multiplying the probability of the first and second levels (Table 6). So, in our example, the final probability of a shift in the project deadline towards an increase in the deadline by 10% will be 18%, and the probability of a shift in the deadline by 20% will be 2%.

Table 6. NPV sensitivity analysis

No.	Risk factor	NPV values ​​($ thousand) when the risk factor changes by
		–20%	–10%	0%	+10%	+20%
1	Changes in the cost of construction and installation work
2	Level 1 probability, %	40	40	20	40	40
3	Level 2 probability, %	95	5	100	30	70
4	Final probability (page 2 x page 3/100), %	38	2	20	12	28
5	<1>	2369	2070	1704	1363	1150
6	Change in sales price 1 sq. m
7	Level 1 probability, %	30	30	40	30	30
8	Level 2 probability, %	5	95	100	80	20
9	Final probability (page 7 x page 8/100), %	1,5	28,5	40	24	6
10	NPV value when changing the risk factor, $ thousand.<1>	1159	1406	1704	1968	2232
11	Shift in implementation deadlines
12	Level 1 probability, %	20	20	60	20	20
13	Level 2 probability, %	70	30	100	90	10
14	Final probability (page 12 x page 13/100), %	14	6	60	18	2
15	NPV value when changing the risk factor, $ thousand.<1>	3493	2982	1704	878	273
16	Average NPV value, $ thousand (according to pages 5, 10, 15)	1764

<1>NPV values ​​correspond to table. 4 “NPV sensitivity analysis”. – Approx. ed.

Scenario Design

Analysis of project development scenarios allows us to assess the impact on the project of possible simultaneous changes in several risk factors. It can be performed either using spreadsheets (for example, MS Excel) or using special computer programs.

involves the calculation of indicators such as dispersion, standard deviation and coefficient of variation based on an array of NPV values ​​obtained during sensitivity analysis (Table 7). Standard deviation (?) reflects the possible spread of NPV values ​​from the average (most probable) value. The coefficient of variation is a measure of risk per unit of return, so it can serve to compare different projects in terms of their risks.

Based on the results of scenario design, a conclusion is drawn about how risky the project is and what the expected loss of profitability is in the event of a negative development of events. In our example, the most likely NPV value for the project is $1,764 thousand, which in principle corresponds to the expected level of $1,704 thousand. Nevertheless, the project can be characterized as extremely risky, as evidenced by the coefficient of variation (57.4%) and the standard deviation ( $1014 thousand). This means that with a probability of 68% the company can suffer losses in the amount of 57.4% ($1012 thousand) of the average NPV 3. Moreover, the main risk factor is the shift in the project implementation period (the largest spread in NPV values). The final decision is made based on whether the investor is ready with a 68% probability to receive an income of $752 thousand ($1,764 thousand - $1,012 thousand) instead of the planned $1,704 thousand.

It should be remembered that no method allows you to select projects that will be successful and profitable with a 100% guarantee. Much depends on the reliability of the expert assessment, so you need to be very careful in selecting experts.

1 For more information about this, see the article “How to make the right investment decision” (“Financial Director”, 2008, No. 2 or on the website). – Approx. ed.
2 Risk management and control (step 4) are not covered in this article. – Approx. ed.
3 Analysis of the data obtained in table. 7, is carried out using the “three sigma” rule, according to which the deviation of NPV from its average size will not exceed a standard deviation (?) with a probability of 68.27%, two standard deviations - with a probability of 95.45%, three - 99.7%.