SYNERGIC EFFECT OF THE ACTION OF OPERATIONAL AND FINANCIAL RISK
This paper allows us to understand the complex action of total risk at microeconomic level, taking into account several factors: the area in which it acts: the operating activity, generating an economic risk, and the financing activity, generating a financial risk; the nature of the observed indicat...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
University of Petrosani
2014-10-01
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| Series: | Annals of the University of Petrosani: Economics |
| Subjects: | |
| Online Access: | http://www.upet.ro/annals/economics/pdf/2014/part1/Miculeac-Cechin-Dobrin.pdf |
| Summary: | This paper allows us to understand the complex action of total risk at microeconomic level, taking into account several factors: the area in which it acts: the operating activity, generating an economic risk, and the financing activity, generating a financial risk; the nature of the observed indicators: the nature of the profit and the nature of the cash; the synergic effect of the action of operational and financial risk, resulting the total risk. We consider that the innovative value of the article resides in the suggested model of correlation between the activity volume and the capital structure, because different approaches give different results, that is why we suggest a unitary approach, a more pragmatic one of the phenomenon. Also, we established the phases observed in order to establish the global profitability threshold of an international corporation which develops activities in several sectors, through several branches. In this article we have used the method of real leverage which measures the total risk of a company by mixing the operating leverage with the financial leverage. |
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| ISSN: | 1582-5949 2247-8620 |