ACCG3040 - Group Assignment (Business Risk Section) PDF

Preview

Summary

Business Risk individual section in group assignment...

Description

Financial Risk Per the annual report for Cleanaway, it is made clear the company is exposed to a variety of financial risks, which potentially can have an “adverse effect” on the financial and operating performance of the company (Cleanaway, 2021, pg.34). To manage these financial risks, Cleanaway has a treasury policy in place, which lists key details on the risks, including the impact and cause, as well as the response and controls to manage them (Dharmi, 2021). Commodity risk, for example, is one such financial risk for Cleanaway, as the company handles ever-changing market prices for various commodities, including plastics, cardboard, glass, and paper. As the prices for these commodities fluctuate often, it can be difficult to accurately estimate the revenue related to this. Managing innovation and growth of the business can be difficult to achieve if commodity risk is inherent. As a result, a decline in the commodities mentioned above can reduce cash inflow, meaning the company has less to spend on new and existing equipment and facilities (Comerica Bank, 2021).

Cleanaway. (2021). Annual Report 2021. Cleanaway Waste Management Limited. Retrieved 29 September 2021, from https://cleanaway2stor.blob.core.windows.net/cleanaway2-blobcontainer/2021/09/2021-Annual-Report-170921.pdf Comerica. (2021). Waste Management Financial Planning for Commodity Risk. Comerica Bank. Retrieved 29 September 2021, from https://www.comerica.com/insights/business-finance/wastemanagement-financial-planning-for-commodity-risk.html. Dharmi, G. (2021). How to produce a treasury policy. The Association of Corporate Treasurers. Retrieved 29 September 2021, from https://www.treasurers.org/hub/treasurer-magazine/howproduce-treasury-policy....