Essays on Risk Management Assessment Case Study

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The paper 'Risk Management Assessment' is a great example of a Management Case Study. Financial uncertainty risks are the biggest threat that challenges the running of firms, hindering efficient performance, and general productivity. Thus the report relays on how to deal with risks both hypothetically and practically. Hence the risk is managed through assessing value using tools to quantitatively evaluate the impact, transitions, and potential losses realized through financial risk the firm (Ampella Limited) is exposed to. Therefore the firm can successfully employ enterprise risk management (ERM). Thus careful ERM involves a chain of strategies in order to shield stakeholder’ s value, sensitize stakeholders on the risk and optimum tolerance to the risk.

Through this, the firm will be able to increase its value and its potential by venturing into profitability. Background Information Introduction Over recent decades, the financial markets have increasingly become volatile due to the significant changes happening in both domestic and global financial markets. Immediately after the post-war period, managers of the corporate organs had little to worry when it concerned foreign exchange rates, while interest rates were fairly and stable allowing firms to know with great certainty their home currency expected and plan for exports.

Considering the financial situation of Ampulla, we review the financial management and the risk factor in the year 2009/2010. During the last twelve months, the firm financial situation has transformed from a small to a major player on the West African mining investments, with much earnings derived from the Batie West Gold project located in Burkina Faso. In the last few years, the firm has grown to a complete re-rating in terms of share price with the most impressive performance unveiled in the last 12 months.

This has created a positive view of the market it is involved in. Objectives of the Report Identify, evaluate, examine and manage risk Enlighten stakeholders of the substantial changes in Ampella’ s risk profile. Risk identification Current changes in the international business environment and the increased volatility of interest rates and foreign exchange rate movements which have developed to a profound implication; this primarily can be used in defining how Ampella deals with their financial risks. These are part of the firm’ s aspects only affect quarterly profits, but rather determining a firm’ s survival.

Management of firms' financial assets has a role in identifying the risks involved in the investment, as the corporate treasurers have become an important area of concern for the mining industry on the global scene. This dissertation seeks to analyze how the Ampella mining activities manage their financial risks in this era as much pressure mounts from its business investments in concern to the financial environment volatility. In reviewing Ampella’ s operations, a great effort is achieved at the firm’ s investments made at the Batie West Project.

The firm has made a strategic decision by imitating a joint venture in its two other projects in Burkina Faso namely Madougou project and the Doulnia project. Analysis Risk Evaluation The firm’ s activities were exposed to a variety of financial risks, market risks; credit risks the foreign currency risks, liquidity risks, and cash flow interests market.

Reference

Alexander, C. A The Professional Risk Managers' Handbook: A Comprehensive Guide to Current Theory and Best Practices, PRMIA Publications, Asheville, 2005.

Australia, S. A Risk management, Standards Association of Australia, North Sydney, 1999.

Dorfman, M Introduction to Risk Management and Insurance (9 ed.), Englewood Cliffs, Prentice Hall, New Jersey, 2007.

Hubbard, D The Failure of Risk Management: Why It's Broken and How to Fix I, John Wiley & Sons, Chicago, 2009.

Ampella Mining Limited Ampella Annual Report 09/10. Retrieved on 23rd August, 2011 from:

Ampella Mining Limited, Risk Management Guidelines and Policy, ACN 121 152 001, Ampella Mining Limited, 2010.

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