Risk Mitigation Businesses can also choose to manage risk through mitigation or

Risk mitigation businesses can also choose to manage

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Risk Mitigation Businesses can also choose to manage risk through mitigation or reduction. Mitigating business risk is meant to lessen any negative consequence or impact of specific, known risks, and is most often used when business risks are unavoidable. For example, an automaker mitigates the risk of recalling a certain model by performing research and detailed analysis of the potential costs of such a recall. If the capital required to pay buyers for losses incurred through a faulty vehicle is less than the total cost of the recall, the automaker may choose to not issue a recall. Similarly, software companies mitigate the risk of a new program not functioning correctly by releasing the product in stages. The risk of capital waste can be reduced through this type of strategy, but a degree of risk remains. Transfer of Risk In some instances, businesses choose to transfer risk away from the organization. Risk transfer typically takes place by paying a premium to an insurance company in exchange for protection against substantial financial loss. For example, property insurance can be used to protect a company from the financial losses incurred when damage to a building or other facility takes place. Similarly, professionals in the financial services industry can purchase errors and omissions insurance to protect them from lawsuits brought by customers or clients claiming they received poor or erroneous advice. Risk Acceptance Risk management can also be implemented through the acceptance of risk. Companies retain a certain level of risk brought on by specific projects or expansion if the anticipated profit generated from the business activity is far greater than its potential risk. For example, pharmaceutical companies often utilize risk retention or acceptance when developing a new drug. The cost of research and development does not outweigh the potential for revenue generated from the sale of the new drug, so the risk is deemed acceptable.
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Give advice on how Fosters can ensure they do not have another similar loss of cash at the end of the next financial year Review of operations: The consolidated net loss of the Group to shareholders, after income tax expense and minority interest comprising the results of continuing operations and discontinued operations, was S89 million in comparison to the previous corresponding period net loss of $464.4 million Income tax benefit was S 235.5 million in the current period compared with income tax expense of $164.2 million in the previous corresponding period. Net interest income was $16.3 million compared with net interest expense of $118.8 million in the previous Foster should adopt an integrated approach to corporate sustainability. The Group is committed to continuously improving its business Practices to maximize positive and minimize negative social environmental and economic impacts. This enhances employee engagement and retention, supports corporate reputation, manages risk and protects the Company’ s social licence to operate.
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