Risk Appetite Assessment of the Metallurgical Industry of the Russian Federation

The research on "Risk Appetite Assessment of the Metallurgical Industry of the Russian Federation" considers the metallurgical industry in terms of risk and uncertainty in 2013-2017. Enterprises of this industry are exposed to a large number of risks, but at the same time, the metallurgical industry is considered one of the basic in the industry of Russia. In this regard, the role of risk and risk appetite for companies in its field increases. It is necessary to control and improve the economic condition of these companies. The aim of the research is to develop guidelines for assessing the risk appetite of companies in the metallurgical industry of the Russian Federation using simulation. Within the framework of the study, it is necessary to perform a number of tasks: analysis of the metallurgy market for the period under study, identification of the main risks and risk factors of non-ferrous and ferrous metallurgy, selection of a suitable method of risk appetite assessment and modification of the model to the specifics of the industry, simulation and calculation of the EaR measure. As a result of the analysis and comparison, the metric CorporateMetrics and the measure EaR were chosen. EaR indicates the value of the maximum loss of profit under the influence of integrated risk. Modelling is carried out on the data of annual financial statements of metallurgical companies from 2013 to 2017. Through simulation were obtained the graph of density of distribution of profit and was calculated EaR at the 95% level of significance, that is was determined level, the risk appetite of the companies of ferrous and nonferrous metallurgy – 53% and 23%, respectively. Also, the sensitivity analysis of profit was carried out and as a result, the strongest impact of industry and currency risks was revealed.