Normative Framework for Risk Index and Its Empirical Analysis

M. V. Shivaani (), P. K. Jain () and Surendra S. Yadav ()
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M. V. Shivaani: Indian Institute of Management (IIM), VNIT Campus
P. K. Jain: Indian Institute of Technology Delhi
Surendra S. Yadav: Indian Institute of Technology Delhi

Chapter Chapter 3 in Understanding Corporate Risk, 2019, pp 21-63 from Springer

Abstract: Abstract This chapter aims to provide a normative framework (primarily based on accounting information) for measurement of corporate risk. The index is based on nine risks and has been developed using expert opinion. In the process two new ratios, namely, modified defensive interval ratio and contingency coverage ratio have been developed. The index has been then empirically computed for sample 429 non-financial companies for each of the 10 years from 2005 to 2015. In addition an aggregative analysis, focussing on phase-wise, age-wise, and industry-wise analysisIndustry-wise analysis has been carried out. Further, a dis-aggregative (risk-wise) detailed analysis has been carried out to develop deeper understanding of risks surrounding the Indian corporates.

Keywords: Risk index; Market risk; Liquidity risk; Solvency risk; Accounting risk; Operating risk (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isbchp:978-981-13-8141-6_3

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DOI: 10.1007/978-981-13-8141-6_3

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