Financial Analysis, Corporate Finance and Risk Management

A special issue of Risks (ISSN 2227-9091).

Deadline for manuscript submissions: 31 July 2024 | Viewed by 6621

Special Issue Editors


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Guest Editor
Higher School of Education and Social Sciences, CI&DEI, Polytechnic of Leiria, Leiria, Portugal
Interests: statistical analysis; data analysis; financial analysis; risk management; marketing; tourism

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Co-Guest Editor
Coimbra Business School | ISCAC – Instituto Superior de Contabilidade e Administração de Coimbra, Politécnico de Coimbra, Coimbra, Portugal
Interests: statistical analysis; data analysis; financial analysis; risk management; marketing; tourism

Special Issue Information

Dear Colleagues,

This Special Issue aims to contribute to research on the topics of financial analysis, corporate finance and risk management. It is imperative to explore cutting-edge methodologies and techniques involving the financial assessment of companies, the strategic planning of corporate finances, and the identification as well as control of risks that may affect companies, thereby ensuring sound and sustainable financial decision making. We invite researchers and professionals from both academia and industry to contribute to this Special Issue by sharing their creative and innovative approaches. The scope of this Special Issue encompasses various aspects, including, but not limited to, the following:

  • Financial analysis.
  • Corporate finance strategies.
  • Risk management frameworks.
  • Financial risk mitigation.
  • Capital structure optimization.
  • Financial market volatility.
  • Sustainable finance practices.

We welcome contributions that offer practical insights derived from real-world applications, as well as theoretical studies that advance the understanding of financial analysis and risk management in companies. Your expertise and research are very important for advancing the fields of financial analysis, corporate finance and risk management. We eagerly anticipate your contributions to this Special Issue.

Prof. Dr. Eulália Mota Santos
Dr. Margarida Freitas Oliveira
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Risks is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • financial analysis
  • corporate finance
  • risk management
  • strategic planning
  • risk identification
  • risk control
  • financial decision making
  • innovative practices
  • financial sustainability

Published Papers (5 papers)

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Research

12 pages, 1560 KiB  
Article
Uncertainty Reduction in Operational Risk Management Process
by Guy Burstein and Inon Zuckerman
Risks 2024, 12(5), 77; https://doi.org/10.3390/risks12050077 - 11 May 2024
Viewed by 316
Abstract
This paper proposes a new framework to reduce the variance and uncertainty in the risk assessment process. Today, this process is susceptible to background noise from sources of human factor biases and erroneous measurements. Our new framework consists of deconstructing the likelihood of [...] Read more.
This paper proposes a new framework to reduce the variance and uncertainty in the risk assessment process. Today, this process is susceptible to background noise from sources of human factor biases and erroneous measurements. Our new framework consists of deconstructing the likelihood of failure function into its sub-factor and then reconstructing it in a formula that can reduce the variance and biases of a human auditor judgment. We tested our new framework on both a questionnaire study and a simulation of the risk assessment process, and the improvement in reducing the variance is significant. Full article
(This article belongs to the Special Issue Financial Analysis, Corporate Finance and Risk Management)
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16 pages, 931 KiB  
Article
Shareholders in the Driver’s Seat: Unraveling the Impact on Financial Performance in Latvian Fintech Companies
by Ramona Rupeika-Apoga, Stefan Wendt and Victoria Geyfman
Risks 2024, 12(3), 54; https://doi.org/10.3390/risks12030054 - 18 Mar 2024
Viewed by 1076
Abstract
Fintech companies are relatively young and operate in a rapidly evolving and ever-changing industry, which makes it important to understand how different factors, including shareholder presence in management roles, affect their performance. This study investigates the impact of shareholder presence in director and [...] Read more.
Fintech companies are relatively young and operate in a rapidly evolving and ever-changing industry, which makes it important to understand how different factors, including shareholder presence in management roles, affect their performance. This study investigates the impact of shareholder presence in director and manager positions on the financial performance of Latvian fintechs. Our investigation centers on essential financial ratios, including Return on Assets, Return on Equity, Profit Margin, Liquidity Ratio, Current Ratio, and Solvency Ratio. Our findings suggest that the presence of shareholders in director and manager roles does not significantly affect the financial performance of fintech companies. Although the statistical analysis did not yield significant results, it is important to consider additional insights garnered from Cliff’s Delta effect sizes. Specifically, despite the lack of statistical significance, practical significance indicates that fintech companies in which directors and managers are shareholders show slightly better performance than other fintech companies. Beyond shedding light on the intricacies of corporate governance in the fintech sector, this research serves as a valuable resource for investors, stakeholders, and fellow researchers seeking to understand the impact of shareholder presence in director and manager roles on the financial performance of fintechs. Full article
(This article belongs to the Special Issue Financial Analysis, Corporate Finance and Risk Management)
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29 pages, 780 KiB  
Article
Robust Portfolio Optimization with Environmental, Social, and Corporate Governance Preference
by Marcos Escobar-Anel and Yiyao Jiao
Risks 2024, 12(2), 33; https://doi.org/10.3390/risks12020033 - 5 Feb 2024
Viewed by 1528
Abstract
This study addresses the crucial but under-explored topic of ambiguity aversion, i.e., model misspecification, in the area of environmental, social, and corporate governance (ESG) within portfolio decisions. It considers a risk- and ambiguity-averse investor allocating resources to a risk-free asset, a market index, [...] Read more.
This study addresses the crucial but under-explored topic of ambiguity aversion, i.e., model misspecification, in the area of environmental, social, and corporate governance (ESG) within portfolio decisions. It considers a risk- and ambiguity-averse investor allocating resources to a risk-free asset, a market index, a green stock, and a brown stock. The study employs a robust control approach rooted in relative entropy to account for model misspecification and derive closed-form optimal investment strategies. The key contribution of this study includes demonstrating, using two sets of empirical data on asset returns and ESG ratings, the substantial influence of ambiguity on optimal trading strategies, particularly highlighting the differential effects of market, green, and brown ambiguities. As a by-product of our analytical solutions, the study contrasts ambiguity-averse investors with their non-ambiguity counterparts, revealing more cautious risk exposures with a reduction in short-selling positions for the former. Furthermore, three types of investors who employ popular suboptimal strategies are identified, together with two loss measures used to quantify their performance. The findings reveal that popular strategies, not accounting for ESG and misspecification in the model, could lead to significant financial costs, with the extent of loss varying depending on those two factors: investors’ ambiguity aversion profiles and ESG preferences. Full article
(This article belongs to the Special Issue Financial Analysis, Corporate Finance and Risk Management)
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13 pages, 407 KiB  
Article
Features of the Association between Debt and Earnings Quality for Small and Medium-Sized Entities
by José Sequeira, Cláudia Pereira, Luís Gomes and Armindo Lima
Risks 2024, 12(2), 32; https://doi.org/10.3390/risks12020032 - 3 Feb 2024
Viewed by 1436
Abstract
The main source of financing is bank loans for Portuguese small and medium-sized entities (SMEs), which implies several constraints to obtaining additional funds. Relying on the argument of Positive Accounting Theory (PAT) that accounting choices are not neutral and on Agency Theory that [...] Read more.
The main source of financing is bank loans for Portuguese small and medium-sized entities (SMEs), which implies several constraints to obtaining additional funds. Relying on the argument of Positive Accounting Theory (PAT) that accounting choices are not neutral and on Agency Theory that information asymmetry prevails between insiders and outsiders, we analyzed the impacts of debt on earnings quality, focusing on its level, its increases, and its term of payment. We estimated econometric regressions using panel data with fixed effects over 2013–2019, using discretionary accruals as an inverse proxy of earnings quality. We found empirical evidence that the relationship between debt and earnings quality tends to vary in sign, as the quality of financial information deteriorates with debt, but as debt becomes high, firms tend to increase the quality of earnings. Furthermore, we found that short-term debt tends to decrease earnings quality more than long-term debt. This article aimed to contribute to the prior literature by collecting evidence that debt levels tend to be an incentive to increase earnings management and fill the gap by analyzing the influence of different debt features. This evidence is useful because earnings management may compromise both stakeholders’ confidence and the efficient allocation of capital. Full article
(This article belongs to the Special Issue Financial Analysis, Corporate Finance and Risk Management)
20 pages, 3130 KiB  
Article
Simulation of Dynamic Performance of DeFi Protocol Based on Historical Crypto Market Behavior
by Iveta Grigorova, Aleksandar Karamfilov, Radostin Merakov and Aleksandar Efremov
Risks 2024, 12(1), 3; https://doi.org/10.3390/risks12010003 - 25 Dec 2023
Viewed by 1685
Abstract
In a rapidly evolving and often volatile crypto market, the ability to use historical data for simulations provides a more realistic assessment of how decentralized finance (DeFi) protocols might perform. This insight is crucial for participants, developers, and investors seeking to make informed [...] Read more.
In a rapidly evolving and often volatile crypto market, the ability to use historical data for simulations provides a more realistic assessment of how decentralized finance (DeFi) protocols might perform. This insight is crucial for participants, developers, and investors seeking to make informed decisions. This paper presents a comprehensive study evaluating the dynamic performance of a newly developed DeFi protocol—NOLUS. The main objective of this paper is to present and analyze the built realistic model of the platform. This model could be successfully used to analyze the stability of the platform under different environmental influences by performing various simulations and conducting experiments with different parameters that could not be realized with the real platform. In the article, the key components of the platform are presented in detail and the main dependencies between them are clarified, in addition to the ways of forming multiple variables, and the complex relations between them in the real protocol are explained. The main finding from the experimental part of the study is that the performance of the protocol representation accounts for the expected system behavior. Hence the system simulation could be successfully used to reveal essential protocol behaviors resulting from potential shifts in the crypto market environment and to optimize the protocol’s hyper parameters. Full article
(This article belongs to the Special Issue Financial Analysis, Corporate Finance and Risk Management)
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