FINANCIAL PLANNING AS AN ELEMENT OF SUBSTANTIATION OF BUSINESS DECISIONS IN THE FACE OF EXISTING RISK AND THE USE OF INSURANCE AS A METHOD OF REDUCING THE DEGREE OF RISK
DOI:
https://doi.org/10.31649/ins.2024.1.104.111Keywords:
financial planning, business decisions, insurance, risk level, financial flows, risk analysisAbstract
Financial planning is a key element in justifying business decisions in the face of risk. It is a systematic process of developing future financial commitments and goals based on an assessment of the current financial position and capabilities. The main goal of financial planning is to ensure optimal use of resources, maximize profitability and ensure financial stability. In times of crisis, financial planning becomes even more important as it allows businesses to adapt to changing conditions and make informed decisions to maintain financial stability.
By analyzing the current state and forecasting financial flows, an enterprise can effectively respond to possible risks and influence its future. The use of insurance as a method of reducing the degree of risk is becoming an integral part of financial planning. By identifying potential threats and choosing appropriate insurance policies, a company ensures financial security against negative events. This helps to reduce financial losses in the event of unforeseen events, such as natural disasters or material damage.
Research shows that financial planning plays a key role in making sound business decisions, especially in high-risk environments. They highlight the methods and tools of financial planning that allow businesses to adapt to changing conditions and effectively manage risks. They also emphasize the importance of insurance measures in mitigating various types of risk, from property loss to financial risks. These studies and publications provide a valuable contribution to the understanding of the relationship between financial planning and insurance, which helps enterprises to rationally address financial challenges and effectively manage risks.
Thus, financial planning and the use of insurance together help enterprises to effectively manage risks and make sound business decisions.
References
Bilousova O. S. (2012) Finansove planuvannya na pidpryyemstvax: teoriya, metodologiya, praktyka [Financial planning at enterprises: theory, methodology, practice]. Kyiv: NAN Ukrayiny Instytut ekonomiky ta prognozuvannya.
Menedzhment ryzykiv. Pryntsypy ta nastanovy [Risk management. Principles and guidelines]. (2019) DSTU ISO 31000:2018. Input 2019-01-01. Kyiv: SE "UkrNDNC".
Ekonomika i upravlinnia pidpryiemstvamy: teoriia, metodyka, praktyka [Economics and enterprise management: theory, methodology, practice]. (2020). Poltava: PP «Astraia».
Laktionova O. A. (2020) Upravlinnia finansovymy ryzykamy [Financial risk management]. Vinnytsia: DonNU im. Vasylia Stusa.
Keruvannia ryzykom. Metody zahalnoho otsiniuvannia ryzyku [Risk management. Methods of general risk assessment]. DSTU IES/ISO 31010:2013, available at: http://metrology.com.ua/download/iso-iec-ohsas-i-dr/87-eea/1062-dstu-ies-iso-31010-2013.
Pysmenna, T. V. (2015) Finansovi ryzyky v hospodarskii diialnosti pidpryiemstva [Financial risks in the economic activity of the enterprise]. Visnyk Zaporizkoho natsionalnoho universytetu. Ekonomichni nauky, no 3, pp. 151–158, available at: http://nbuv.gov.ua/UJRN/Vznu_eco_2015_3_22.
Abbas, S. A. (2018) Entrepreneurship and information technology businesses in economic crisis. Entrepreneurship and Sustainability, issue 5(3), pp. 682–692, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3156089.
Boogaard, К. (2022) What Is a Risk Matrix? available at: https://www.wrike.com/blog/what-is-risk-matrix/#What-is-a-risk-assessment-matrix-in-project-management.
Braumann, Evelyn C., Hiebl, Martin R. W., and Posch, Arthur. (2024) Enterprise Risk Management as Part of the Organizational Control Package: Review and Implications for Management Accounting Research. Journal of Management Accounting Research, vol. XX, no XX, pp. 1–23, available at: https://publications.aaahq.org/jmar/article/doi/10.2308/JMAR-2021-071/12151/Enterprise-Risk-Management-as-Part-of-the.
Marcelino-Sádaba, S., Pérez-Ezcurdia, A., Echeverría Lazcano, A. M., and Villanueva, P. (2014) Project risk management methodology for small firms. International Journal of Project Management, vol. 32(2), pp. 327–340, available at: https://www.researchgate.net/publication/259512541_Project_risk_management_methodology_for_small_firms.
Saeidi, P., Saeidi, S. P., Sofian, S., Saeidi, S. P., Nilashi, M., and Mardani, A. (2019) The impact of enterprise risk management on competitive advantage by moderating role of information technology. Computer Standards & Interfaces, vol. 63, pp. 67–82.
Tan, D. (2020) Quantitative Risk Analysis Step-By-Step, available at: https://www.sans.org/reading-room/whitepapers/auditing/quantitative-risk-analysis-step-by-step-849.
