Risk Management

Emanuele Bajo ()
Additional contact information
Emanuele Bajo: University of Bologna

A chapter in Topics in Corporate Finance, 2025, pp 3-20 from Springer

Abstract: Abstract Firms are inherently exposed to various forms of financial risk. For example, companies operating internationally often conduct transactions in foreign currencies, leaving them vulnerable to unfavorable exchange rate fluctuations. Such shifts can erode revenues or inflate costs, ultimately compressing profit margins. Similarly, financial leverage introduces exposure to interest rate volatility, where abrupt increases can significantly inflate the cost of liabilities. More broadly, many firms rely on commodities for their production processes, and the often-significant price swings in these markets can severely impact profitability. In extreme cases, these fluctuations may entirely eliminate profits or even push a firm toward financial distress. For instance, energy costs, closely tied to oil and gas prices, have exhibited considerable volatility in recent years, leading to substantial losses for companies across various industries worldwide.

Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-07046-3_1

Ordering information: This item can be ordered from
http://www.springer.com/9783032070463

DOI: 10.1007/978-3-032-07046-3_1

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().