Quantitative Risk Analysis: how not to lose business?

Today, a large number of projects of business plans, even in the presence of their respective section containing analytical aspect, the problem is narrowed only to the analysis of financial and banking risks and do not reflect the full range of risks.However, professionals need to make extensive use of both qualitative and quantitative risk analysis.More focus on the second type.

Quantitative analysis applies only to the risks trained in qualitative analysis of how those with that have a significant impact on the achievement of goals.In conducting this analysis should be evaluated the effect of such events by assigning certain digital rankings.

Quantitative analysis can sometimes not be required to develop effective measures to respond to risks.The most common among frequently used analytical methods are as follows:

- sensitivity analysis, which involves determining the reflection of the uncertainty of each individual element of the business project while taking other elements of the base value;

- consideration of the projected cash value by multiplying each value by the probability of its occurrence, the results are summarized.

quantitative analysis of any investment project defines the numerical value of some of the risks.He is based in the territory of the probability theory, operations research and mathematical statistics.

quantitative analysis is carried out in the event of two conditions: a basic calculation of the business project and a full qualitative analysis.Its task is to numerical measurement of the impact of certain factors on the dynamics of changes in the criteria, reflecting the efficiency of the project.

often used such methods of quantitative analysis bznes projects:

- the analysis of such performance indicators as net present value and rate of return, and profitability index;

- adjustment of the discount rate;

- Monte Carlo method (second name - simulation);

- the construction of a decision tree.

All of the analytical methods of business projects are based on a probabilistic approach.

quantitative and qualitative analysis, and their effectiveness is directly dependent on the requirements of the final indicators (results), the information base and the reliability of planning.For example, for small projects reasonably effective methods are: analysis of the adjustment of the discount rate of and sensitivity.For large projects the same - Simulation and construction of curves of probability distributions.When the project depending on the result of the adoption of certain decisions, it is necessary to carry out the construction of a decision tree.

Thus, the methods of analysis to be applied in a complex with the simplest of their species in the evaluation stage, and the more complex and requires additional data - with the resulting rationale of business projects.