Risk management has become a key factor in assessing the future performance and effectiveness of management. Now a days many companies deal with foreign players, and receive its return in multiple currencies. They face foreign exchange risk because of sudden&drastic changes in exchange rates, which may cause significantly damaging financial losses from otherwise profitable export sales. Information Technology Company faces this risk higher because major share of its income comes from foreign countries in foreign currencies. It is now important to know: what the status of Indian I.T. companies is, in regards to foreign exposure, what are the instruments they are using for risk minimization, what are the recent statistics of its profit/loss due to Forex transactions and what is the resultant impact on its profitability? This research paper focuses on how selected I. T. companies in India manage their financial risk, who has the authority to establish financial risk management in selected I. T. companies, the ways adopted to support financial risk management policy, preference given to the approaches for dealing with risk, types of financial risks managed, model preferred for measuring credit risk, market risk&operational risk, types of derivative instruments used & resultant impact of financial risk management practices on the overall value&net profit of selected large scale I. T. companies.
Keywords
Financial Loss, Financial Risk, Impact of Financial Risk, Risk Management, Risk Measurement Model.
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